The Definitive Office Fit-Out

Preparing an accurate estimate for an “office fit-out budget” is quite a complex procedure, and is a critical task for organizations. Office fit-out rates can vary depending on the tenancy and the level of works required and workstations or furniture selected.

Ensuring the financial estimates are correct is the best way to avoid re-visiting Capital Expenses. Contextually, much confusion has arisen from the use of the word “fit-out budget” as its inferred meaning can be quite different across the related segments of Australian construction industry:

Budgets that have evolved from “builders fit-out” estimates have caught a few people short, with no allocation for joinery, furniture, window blinds, or other services in the budget;

Budgets that have evolved from “furniture suppliers” may not necessarily include accurate interior construction or fit-out/building costs;

It is important to understand the following definitions well, before finalizing an estimate or budget for an office fit-out:

Base Building fit-out – if you are looking at a brand new or fully refurbished tenancy, it may be in a “lock up”, “base-building fit-out” or “base-building shell” condition, which means there will be no internal walls, carpets, painting, finishes or furnishings supplied. In most cases the tenancy will include basic services and have a ceiling, base lighting, electrical services switchboard / MDF, kitchen and toilet facilities.

The tenant will usually be responsible for the “office fit-out” additional internal partitions, joinery, lighting, supplementary air-conditioning, power and data, office workstations, office furniture and special finishes. Tenants need to be careful when considering office tenancies which do not include the basic base-building fit-out or essential services as these can be of considerable cost to the office fit out company tenant to acquire and these costs could be negotiated with the leasing agent / landlord so as to be off-set in the leasing agreement.

Office fit-out – is used fairly generically and indifferently within the industry. A request for an office fit-out estimate from a partition contractor, will generally assume you are referring to fit-out rates for walls & doors and will not necessarily include “hidden costs” such as the sites accessibility, location, consideration of the ceiling height, additional services, carpet protection and/or corporate finishes. Similarly, an estimate from an office furniture supplier won’t necessarily allow for custom furniture sizes, custom joinery, electrical & data requirements, building alterations or partitioning.

Lastly, If a tenant engages different trades to undertake their office fit-out (i.e. one contractor for office partitioning and building works, a company for workstations & furniture, another services provider for data and electrical and so on) there is a large probability they will end up engaging a project management firm to orchestrate these providers to meet cost, time and quality constraints which adds another layer of cost which is again often over-looked or not accounted for.

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