Downscaling your office space? Here’s what you need to know

Recently at St Ferrer, we’ve noticed an increase in the number of clients approaching us for help downscaling their office space–either to a smaller office or a co-working space. While this trend has been present for a while as workplaces reorganise to accommodate more flexible work arrangements, the economic damage wrought by Covid-19 appears to be greatly exacerbating this shift.

And this is not just anecdotal. Danish Real Estate marketing platform MatchOffice recently surveyed 1172 workplaces from across the globe to find out how Covid-19 has affected them. The results allude to the extent to which the pandemic looks set to reshape the commercial real estate market in the years ahead. When asked to what extent the pandemic will impact future lease terms, around 40 percent of respondents answered that it would to either a considerable or very high degree. Only 13 percent believed their lease terms would remain unchanged.

These ‘changes’ can by and large be interpreted as both downscaling office space to reduce overheads and reorganising to adjust to new health and safety requirements around social distancing.

Here in Australia the slow road back to ‘Covid normal’ will undoubtedly lead many business owners and office managers to rethink what they require in terms of office space, and what they can afford.

If you are in this position, you may find the scale of the task at hand overwhelming. Here, breaking the process down into smaller tasks can be helpful. And, where possible tasks can be delegated. When mapping out the process, one often overlooked aspect of relocating a workspace, and one that I will discuss in more detail, is what we refer to as ‘back to base’. This is the process of returning your office to the condition it was leased to you in to ensure a full bond repayment.

What you need to know about downscaling

As a building company specialising primarily in office fit outs, we understand what is involved in an initial fit out and what is involved in reversing that process.

It’s been my experience that office managers and business owners underestimate the scale of work involved in returning an office space back to base. And, as follows, they also underestimate the cost.

Understand the condition the office space must be returned to:

It is generally expected that the work undertaken during an office fit out is undone in the back to base process. This can involve the obvious, such as removing partitions, office furniture and signage, but may also involve returning the mechanical and fire back to where it was and conducting an air balance test.

That said, there are efficiencies to be found that can greatly reduce the time it takes to complete the process and the costs involved. While these will vary with each project, we find one of the most beneficial steps is to meet with the real estate agent or landlord to establish a comprehensive list of what is expected on handing back the keys.

A major benefit of this approach is it allows us to negotiate what does and does not have to be done. For instance, the landlord may expect an air balance to be completed, but if a tenant will be moving in and undertaking a new fit out, they will need to do an air balance on completion. Thus, there is little point conducting one prior to moving out. If this is the case, it may be possible to negotiate with the landlord to skip this requirement.

Be realistic:

Social distancing restrictions are placing limits on the level of involvement staff can have in the process of moving office. It may no longer be realistic to expect staff to pack up their desks and be involved in the moving process.

A client we carried out a back to base for recently didn’t want staff involved at all in the process owning to concerns about Covid-19. There are legitimate concerns about the safety of staff and also potential legal implications from putting staff in a situation whereby they become sick.

Recruiting a professional removalist is usually the best option. Also, if you are employing a building company to carry out your back to base, they could be well placed to carry out this work. When carrying out a office fit out building companies like St Ferrer regularly pack up and unpack worksites to relocate furniture while completing a fit out.

In Summary:

Downscaling from one office space to another is undoubtedly a significant undertaking. It can create stress and uncertainty among employees, and there are often hidden costs involved. But when done well it can be a smooth process and one that sets your company up to adapt to a changing and more uncertain future. Perhaps the most significant take-home here is that understanding the scale of the task will help prepare for all eventualities. As the saying goes: ‘being forewarned is to be forearmed’.