We all know the demands of the office market are changing; with redundant office space at the beginning of the pandemic to the consequent rise of hybrid working strategies, we can all agree the office sector is different now to that of pre-2020. And whilst investment and uptake has begun to rise once again, we are now seeing demand being pushed into a new type of workspace for the sector – one which is very quickly gaining popularity.

The rise of plug and play offices

Introduced to provide an alternative to co-working spaces and serviced offices, Cat A+ fit outs, or the playfully coined plug and play offices, provide a ready-to-occupy space for tenants to move into. The fit out has been completed to a standard fit for immediate use, so tenants just need to ‘plug’ in and start ‘playing’…or working!

Plug and play offices provide a variety of benefits to tenants including decreased initial expenditure due to minimal amendments required to the space, and increased flexibility on lease terms. Cat A+ fit outs are also beneficial to landlords, with a reduced risk of holding a vacant space and a straightforward tenancy to re-lease.

A significant benefit of plug and play offices is their reduced environmental impact. Re-using existing fit outs between tenants is a far more sustainable option than removing the fit out at the end of the lease, as in typical dilapidations. Imagine the associated waste and carbon that is now saved by not undertaking a new fit out.

With this in mind, Cat A+ fit outs remove the flexibility of fitting the space to your own business needs and wants, but also look and feel. For businesses looking for an office that communicates the company culture, a Cat B fit out is likely going to be more suitable. But for those happy with the designed backdrop of a Cat A+ fit out, with all its breakout spaces and welcomed amenities, it’s a great alternative.

Let’s get the record straight

For any building it is important to undertake a schedule of condition, but it is especially important for a plug and play office which will be seeing a comparatively greater number of tenants over a period of time, all who are sharing a fit out. Cat A+ fit outs involve a large amount of expenditure, and so it is in the best interest of landlords to protect this investment from potential damage with high-quality, appropriately detailed condition records. Holding condition records provides protection to both landlords and tenants when it comes to dilapidations, so is important to undertake upon each new tenant occupying the office.

Before signing a letting agreement, some of the services we would recommend including in your condition record includes:

• Floor, mechanical and electrical, and furniture plans – whilst beyond that of a typical condition record, this will act as a record of exactly how the space was let
• Specifications – this shows the standard of a space, which is especially important if a landlord has incurred additional capital expenditure on higher specifications such as carpets
• Fixtures and fittings – including furniture and kitchen appliances, including this in your condition records ensures all parties know exactly what was provided at the lease commencement, causing less disputes at expiry
• Review of lease covenants – in conjunction with the client’s solicitor, this ensures relevant future dilapidations recoverability and minimises disputes where generic clauses are included that don’t fit the circumstance

Playing with innovation

PropTech has the ability to transform real estate in all sectors including offices, and there are a lot of exciting initiatives already in place when we look at capturing data. For landlords and tenants alike, it can be challenging to determine what the ‘original state’ of a property was like once you reach the end of a lease. Our H360 data capture cameras ease this difficulty by logging the entire space photographically, making annotations in the places where this is required. This means we can create walk-throughs of your office, at the beginning and end of a lease, providing a direct comparison to the condition of the space.  The level of detail captured by our equipment is even down to cobwebs on a skirting board!

With virtual data capture, such as H360, you can record a greater level of detail in a shorter amount of time, including required information such as plans, specifications and supporting documents. The entirety of this data can then be accessed via a weblink which can be included in the lease appendix for both the landlord and tenant to see with ease. An additional benefit, not only can the data capture be used as a condition record recorded in the lease, it can also double up as marketing collateral. From a 3D tour to snapshots in a brochure, using virtual data capture is a cost-effective tool for landlords that will even allow prospective tenants to view the space virtually.

PropTech is an exciting area of real estate which is providing tangible differences to processes and services. Making use of innovation in condition records is a cost-effective decision for landlords that allows for smoother and more efficient leasing for both landlord and tenant.

In a world where flexibility is now a must-have for both employers and employees, it is no wonder that plug and play offices have taken the sector by storm. To safeguard your workspace, make sure you undertake a high-quality condition record that protects both landlord and tenant. To find out more, get in touch with our Head of schedules of condition, Philip Hirst.