Rethinking speculative Cat A fit-outs: waste, time, carbon and cost

In the wake of World Green Building Week, Sarah McDonnell, Director, Project Management in our Dublin office, asks why generic interior office fit-outs – known as Cat A fit outs – remain the market norm for finishing development and refurbishment projects in of office buildings.  

A significant proportion of Cat A fit outs are typically destined for the skip. Landlords install them to create a ‘blank canvas’ effect to market spaces to prospective tenants, while tenants then seek to personalise their space and will rip it all out to install their own walls, finishes and equipment to create the right space for them. We need to break this damaging ‘fit-out-to-strip-out’ cycle.

Sarah McDonnell made the case for banning speculative Cat A fit-outs in a recent article for Green Street News. You can read that here (subscription applies). A digest of Sarah’s article continues below.

A missed opportunity for sustainable buildings

The Irish Green Building Council’s Marion Jammet, Head of Policy and Advocacy and Biodiversity Lead, recently highlighted the fact that ‘embodied carbon in construction accounts for 14 per cent of Ireland’s national emissions and that this could increase without action, threatening climate targets.’ Yet despite ESG sitting high up the agenda for building owners and occupiers alike, the habit of installing (and scrapping) speculative Cat A fit outs does contribute a huge volume of material waste as standard practice. The irony is that many office developments today are geared to high levels of sustainable performance, but still contribute tonnes of carbon through this wasteful process.

The market norms in action

Only in the last 18 months, a major Dublin tenant relocated to a new campus of over 300,000 sq ft. As part of the exit agreement, the previous tenant of the building was required to reinstate all the Cat A elements, despite all parties knowing that the new tenant was secured and much of the brand new fit out would soon be replaced. The reason relates to lease terms which couldn’t be agreed with the landlord by previous tenants. 

From our experience, a high-end fitout of an office development of around 60,000 sq ft could account for up to 250 tonnes of carbon. In an office building of around 100,000 sq ft (which could house more than 1,000 employees, depending on the occupier), a Cat A fit out can average 750 tonnes of carbon. This is equivalent to 4,000 flights from Dublin to Paris (at 185 kg carbon per flight). 

The maths is pretty simple. By not installing the Cat A and instead allowing the tenant to complete their fit out, waste is avoided, ensuring only what’s needed is installed. 

What’s the appeal of speculative Cat A fit-outs?

Commercial real estate professionals see the speculative Cat A process play out across the market time and time again and there is wide agreement that this is not sustainable or practical. However, commercial agents still struggle to let space without it. This is because incoming tenants without industry experience or an experienced team behind them perceive ‘bare’ space as unfinished and therefore unappealing for their needs and time frames. In reality, these tenants never want a ‘generic’ space, so they invest significant time and money creating bespoke office layouts with new materials and equipment.  

However, this takes a similar amount of time as starting without the generic fit out in place, so the perceived time advantage does not justify the carbon cost. 

Time to change the norms

The industry has made incredible progress in recent years to reduce carbon, yet speculative Cat A continues to be the norm rather than the exception. Surely as an industry, calling for a ban is one of the easiest and most immediate ways that we can make a difference? Investors, developers, asset owners, managers and property consultants need to collaborate more closely on achieving a less wasteful and time-poor approach than currently exists. 

As professionals with the skills and commitment to make a difference, we should all be helping tenants to understand the true cost of fit outs which are at best only partial and which invariably result in an unnecessary return to square one. We should also seek to eliminate generic Cat A fit outs from the development or refurbishment process, allowing tenants to create the spaces they need in the most sustainable and relevant way possible. But firstly – and most important – is that the true scale of the issue is understood, so that we can come together to solve it.