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Fitted Offices Deal Highlights Report

By May 11, 2023Office Agency

We have found that over the past few year occupiers have become increasingly concerned about capital expenditure for their fitout of their offices. As a solution to this Hurst Warne have advised a number of clients to speculatively fit out office suites to a high standard with a good quality breakout/kitchen area, a board room, self-contained offices and a full furniture package.

Following occupier feedback many landlords are now going slightly further than this and installing a small comms cabinet and IT infrastructure to desk/Wi-Fi points so that occupiers can walk straight in and start working without waiting, paying for and procuring a fit out.
The sweet spot does seem to be office suites of between 2,000 to 3,000 sq ft but we are now starting to see a trend of this creeping up towards 4,000 sq ft as the approach gains traction in the market. We expect this will increasingly be the norm for suites under 5,000 sq ft over the coming years, especially as occupiers are requiring better quality working environments in order to encourage staff back into the office.
This approach is a win for both landlords and tenants. Landlords are benefitting from a slightly increased rental tone (circa 10%) reduced incentives and much reduced void periods. Of course, the landlord will have the up-front cost of fitout costs which range from £45-£55 per sq ft or higher for a top end fitout.

It’s worth pointing out though that these fitouts are fairly generic and should last for two lease terms, generally 6/8 years, albeit with some light repair at the midway point. Tenants of course will save this upfront cost and negate time in obtaining fitout quotes and managing the whole process which frees up occupiers to concentrate on their business.
As the saying goes (well my saying) ‘Build it and they will lease it’.

For further in depth advice on fitted offices please contact:Nic Pocknall
07770 416219

Please look at the report download below.