GN10.1: The fit-out process

Guidance Note purpose 

The purpose of this Guidance Note is to provide asset managers, property managers and facilities managers with information about incorporating sustainability within the fit-out of commercial properties. 

Context 

A property undergoes fit-out for a number of reasons over its lifecycle.  These include: 

  • Original fit-out of a new building to meet the specification of the occupiers, or re-fit to meet occupiers’ changing needs, or the needs of new occupiers. 
  • Remaining compliant with evolving government regulations, for example Energy Performance Certificates or Minimum Energy Efficiency Standards. 

The extent to which sustainability can be incorporated within a property’s fit-out will depend on the level of responsibility and influence the property owner and agent has within the decision making of the fit-out and the aspirations of the occupier.  

Importance 

Most of the benefits relating to the fit-out of a property accrue to occupiers.  These benefits can relate to, for example: 

  • Enhanced staff performance. 
  • Attraction and retention of talent. 
  • Increased efficiency and lower operating costs. 
  • Reduced regulatory compliance risk. 

Sustainable fit-out can also be used to strengthen brand through alignment with broader corporate social responsibility objectives and can help foster enhance stakeholder trust and reputation. 

Incorporating sustainability within a property’s fit-out also provides a number of benefits to asset managers. For example: 

  • Meeting investor requirements: There is growing investor interest in the Environmental, Social and Governance (ESG) performance associated with their real estate investments, from both financial and CSR perspectives. 
  • Meeting occupier demand: The way in which a space is conditioned, how air is ventilated, how the space is lit, materials used, and access to local amenities and green space can all have a profound effect on occupation. Occupiers are also increasingly concerned about the environmental and social impacts of their business operations.  
  • Protecting and enhancing property value: With sustainability increasingly seen by occupiers as a standard characteristic of good quality commercial space, the sustainability characteristics of commercial properties can have a positive impact on value through increased letting speeds, longer lease length, higher rental premiums, higher occupancy rates, lower void levels and reduced obsolescence. ​​
  • Reducing regulatory risk: Considering sustainability during fit-out can contribute towards the continued compliance across a range of regulatory topics.  These include, for example: 
    • Energy performance standards:  Minimum Energy Efficiency Standards. 
    • Building Regulations: Energy Performance Certificates, Display Energy Certificates. 
    • Other sustainability regulations:  Duty of Care, Energy Savings Opportunity Scheme. 

Responsibilities & Interests

The table below summarises the key activities associated with incorporating sustainability within a property’s fit-out, and highlights where asset managers, property managers and facilities managers are likely to have a responsibility or specific interest. 

  • AM - Asset Manager
  • PM - Property Manager
  • FM - Facilities Manager

1: Marketing the space 

Stakeholder:

2: Engagement and agreement 

Stakeholder:

3: Requirements framework  

Stakeholder:

4: Design and delivery 

Stakeholder:

5:  Works 

Stakeholder:

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How to

Intro

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The approach to property’s fit-out is collaborative, involving consideration of the goals of both asset managers and occupiers.  Property managers provide an important role in coordinating the process, with input from facilities managers. 

The following elements should form part of property managers’ consideration of sustainability within fit-out. 

1. Marketing the space

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Finding the right space for their business is important for any occupier. Including sustainability characteristics when seeking space can help inform the selection of space that maximises occupier benefits. 

The marketing of a property is generally the responsibility of an asset manager.  It is, however, useful for a property manager to be aware of the way in which sustainability principles may have been incorporated in an asset manager’s approach. This may include: 

  • Where a tenant has vacated, review what equipment can be retained or may be useful for an incoming tenant. The property manager may have been able to support this activity by undertaking a review of the outgoing occupier’s equipment. 
  • If Cat A works are required to showcase the space, ensure only equipment that is of low replacement risk is installed. This will also have the benefit of increasing the speed in which a tenancy can enter the space.  Where possible, equipment should be selected with net-zero carbon targets in mind. 
  • For new builds and major refurbishments, the use of a marketing suite to illustrate the look and feel of sustainability features avoids the need of fully specifying the whole building.   Innovative technology, such as virtual reality, can avoid speculative fit-out, enabling agreement of a specification with an occupier, and implementing this, to avoid waste.    

2. Engagement and agreement

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The arrangements for agreeing a lease are generally the responsibility of an asset manager.  Property managers should be aware of the way in which sustainability was highlighted early in discussions between asset managers and occupiers, and the outcomes and decisions, so that they are able to consistently build on the approach during the later stages. 

Asset manager and occupier discussions on sustainability are likely to have: 

  • Started during initial engagement where the occupier was making enquiries. 
  • Been followed by setting requirements once the decision was been made to take the space. 
  • Included how those requirements will be set out within legal agreements. 

3. A Requirements Brief

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A Requirements Brief is key document that captures an occupier’s desired sustainability requirements for a fit-out. 

An asset manager plays a central role in the development of a Requirements Brief by supporting occupiers via the provision of advice regarding the overall performance and features of a property, including those relating to sustainability. 

While, in many instances, the asset manager may engage occupiers directly, a property manager is often involved in the process through consulting and facilitating discussions.  A property manager may, for example: 

  • Highlighting the potential opportunity for occupiers to pursue various ratings and certifications schemes, such as BREEAM, WELL and Fitwel, t be taken forward in collaboration with sustainability specialists. 
  • Support an occupier in the review of an asset managers’ portfolio-wide Building Fit-Out Guide, advising on the appropriate selection of materials, technology or equipment. 
  • Do property managers have this level of detailed understanding or are they highlighting the potential and redirecting to ESG specialists? 

The Requirements Brief should cover the whole project life-cycle and be developed as early as possible.  It serves as reference document at key project stages and will evolve to become more refined and detailed through the course of the fit-out project. 

A clear, concise Requirements Brief, that develops over time can: 

  • Provide a simple set of requirements to inform an occupier’s agreement with owners and letting agents. 
  • Be used as a primer to support project team procurement and set-up, before being used as a core document in the briefing of the selected team. 
  • Help build a foundation for design and specification documents. 
  • Ensure that design review and construction delivery meet the occupier’s and asset managers’ requirements. 
  • Support a smooth commissioning and handover by allocating appropriate resource to those phases. 

4. Design and delivery

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Design review and sign-off 

The processes linked to setting, agreeing and monitoring the design and specification are pivotal to the delivery of sustainable fit-outs. 

Asset managers play a key role in design and delivery by ensuring that there is a review and sign-off process in place at each stage.  While in some instances, a building surveyor, with M&E support, may be contracted to undertake the review, this responsibility can also be delegated to a property manager. 

This review involves checking the lease arrangements and confirming that the design confirms to these requirements and how the building operates.  Sustainability should run as a thread throughout this process. This will help to: 

  • Reduce the risk of the fit-out failing to meet any project sustainability requirements. 
  • Reduce the risk of conflicts between the fit-out and the base-build elements. 
  • Leverage asset and property managers’ knowledge of the base-building to guide beneficial and realistic design solutions. 
  • Ensure design solutions and specification decisions are optimised via ongoing review against the Requirements Brief. 
  • Ensure any value engineering process genuinely adds value rather than simply cuts costs. 

5. Works

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It is important that the requirements agreed within design and delivery are embedded during the various phases of works. 

An asset manager continues to play a key role during this stage, by ensuring there is a review process in place at each stage.  In instances where an asset manager decides to engage a property manager to undertake these reviews, the property manager will establish and implement arrangements to check that sustainably is been incorporated, as intended, within the following phases: 

Construction 

Following Design Sign-off, the fit-out can enter the next major project phase where construction works commence on-site. Key objectives at this stage are to: 

  • Identify a competent contractor through Project Team Selection. 
  • Embed sustainability requirements as part of the agreed scope of works – both in terms of the design solutions and the methods of construction. 
  • Monitor project progress and gather associated data to assures the delivery of requirements. 

Commissioning 

A commissioning process will typically involve the testing of key systems, for example, HVAC, controls, lighting, security, fire and water distribution systems. Successful commissioning ensures that these systems operate in an efficient and integrated way, providing a comfortable, safe and secure indoor environment. This is a particularly important for fit-out projects where there is integration required between systems belonging to the asset manager and the occupier respectively. 

Part L of the Building Regulations also requires that all controlled services that falling within the scope of the regulations are commissioned. Systems that are not commissioned properly can operate inefficiently, and the desired Occupier Benefits will be at risk. This can have a direct impact on occupant satisfaction and productivity. 

Completion and handover 

Confirming the works as complete and fit for occupation should involve all key stakeholders.  It is important that this includes confirmation that sustainability requirements have been met, for example, features included and commissioned, and construction measures evidenced, will be part of the wider review of completed quality against the scope of works. 

The handover stage is also critical in ensuring that property and facilities managers and occupiers, fully understand the sustainability features of the space, and receive training to ensure they are sufficiently equipped to manage and operate the space effectively. 

Related Guidance Notes

The following Guidance Notes contain related information: 

Additional Resources