The Workplace Blog

What to consider when budgeting for an office fit-out

[fa icon="calendar"] 11-Aug-2015 12:04:00 / by Callum Hutchinson

In today’s ever changing workplace environment, an office is far more than just a space for your employees to work in. There is now an increased awareness of how the working environment can affect, not only creativity, but productivity too.

An office fit out is a multi-faceted project, so there will be a number of things to consider when setting out your budget. From the number of staff you have, to the technical requirements of your business. All businesses are unique with very specific requirements so there will be a number of questions that only you will know the answer to.  In this article we take a look at the subjects you need to discuss with your office fit out company in order to effectively manage your budget and create your dream workplace.


Types of Fit Out

As with any work of this nature there a several different types of fit out with varying degrees of complexity and of course price

Some projects will be purely looking at the aesthetics of your workplace, while others will be more complicated, including structural changes. Even the budgets for purely cosmetic fit outs can vary considerably depending on final touches, quality and finishes. When embarking on your new project it is imperative that you clarify with your supplier the cost and complexity before setting off on your journey to the perfect office.

Here we have included a brief description of the most common types of fit out project:

Shell and core

Shell-and-core works will generally comprise the structure, cladding, base plant, completed common areas and external works. It will include fitted-out main reception, lobbies, staircases, toilets, lift shafts, basements, loading bays, car parking and so on.

Category A fit out

Category A generally describes the level of fit out that your space (as the tenant) is completed to by the developer. There is no standard definition, but a Category A fit out would often include:

  • Raised access floors and suspended ceilings.
  • Distribution of mechanical and electrical services.
  • Basic internal decoration
  • Basic heavy-duty carpet

Category B fit out

Category B completes the fit out of the internal space to your requirements. This would typically include:

  • Final finishes and branding.
  • Installation of offices.
  • Installation of specialist facilities in meeting rooms and breakout areas
  • Fitting out reception areas.
  • Installation of specialist lighting.
  • Installation of ICT equipment.
  • Installation of audio visual equipment.
  • Fit out of kitchen areas and tea-points
  • Installation of furniture.

The developer may make ask the tenant to carry out some of their more sensitive category A works on their behalf during the category B fit out, when they may be less subject to damage. The developer will pay the tenant a sum equivalent to the cost of the works had they carried them out themselves.

Turnkey Developments

A turnkey development is one where a contractor or developer undertakes a complete project to deliver a totally ready-to-use environment where you only need to ‘turn the key’.

These categories do not have standard definitions, and so it is very important that contract documentation sets out precisely what work is to be carried out and by who, rather than relying on ambiguous short-hand terms.

An agreement to lease between landlord and tenant should clearly define:

  • What comprises the shell and core built by the developer, including space provision in common areas for tenant equipment such as standby generators, extra chillers, or uninterrupted power supply plant.
  • What constitutes category A fit out installed by the tenant but funded by the developer/landlord.
  • What tenant equipment is to be installed in common areas?

Category A capital allowances might also be a factor in agreement to lease negotiations.

A rent-free period may be provided by the landlord as a notional contribution to the tenant’s fit out. It not unusual for a tenant to start fitting out their areas before completion of the shell and core works, although the rent-free period will be triggered by practical completion of the shell and core works.

The tenant’s fit out may involve rectifying problems in the developer's works. In order to meet the fit-out timetable these may be funded by the tenant who may then make a claim to recover their costs.


A comprehensive office fit-out checklist

Measuring Up 

Once you’re in position to decide on the type of project that will best meet your requirements, your fit out company will be able to put together a quote based on your brief.

This typically includes everything from electrical services, lighting, furniture, contractor fees and everything else. This projected cost should account for everything required to create your desired finish.

Often these costs are based on a per square foot basis. (You can use our office space calculator to find out your requirements). Ultimately the size of your office will have the biggest impact on the cost of your project, so it is imperative that you maximise your space to get the most bang for your buck! This being said if you are forecasting exponential growth over the next 5-10 years you will also need to future proof your office and incorporate options for expansion and the ability to fit more staff in.

Signing on the dotted line

As the saying goes ‘failing to prepare is preparing to fail’, so ensure that you have covered all bases at the beginning to avoid any unwanted expenses later down the line that can easily eat in to your budget.

As with any contract, it is of huge importance that you know exactly what you’re signing for when it comes to that final decision to move ahead. Is VAT included? Will you have to pay extra for minor changes? Who is liable if the project overruns? Are all third-party costs accounted for? Consider everything carefully.


With all this information in mind you should now be ready to move forward confidently on your new office fit out adventure.

To help you on your way we recommend you download both our Complete office fit out check list and our comprehensive guide to choosing an office fit out supplier.


A guide to selecting an office interior fit-out company

Topics: Office Redesign, Office Fit Out, Office Design, Office Refurbisment, ROI, Budgets

Callum Hutchinson

Written by Callum Hutchinson