Starting a new commercial Lease is a thrilling opportunity for any retail or business Tenant. Designing a space that reflects your brand’s identity is key to setting the stage for success. We have put together some tips as a guide to managing the fitout process and things to consider, from gaining approval through to dismantling at the end of the Lease, as well as capitalising on potential Landlord contributions.

Approval Process

Before diving into design, it’s important to align your fitout plans with your Landlords requirements and the associated building codes. Check with your Landlord to see if they have design guidelines published, which will outline their minimum expectations for design and finishes and may even include contact details for some of their preferred contractors.

Next, you should collaborate with a professional designer and fitout contractor who specialises in commercial tenancies. Share the Landlords design guidelines, to ensure your designer is working to the right standards, before submitting your concept plans to your Landlord for consideration. Once your concept is approved, your designer can delve deeply into the full detailed design, including the selection of finishes.  The full plans will then also need to be worked through with the Landlord for their approval, prior to any works taking place.  This process may involve some back and forth to ensure compliance with the Landlords guidelines, as well as any health and safety regulations or building codes that are relevant.

To expedite this process, you might consider using a recommended designer or contractor, who has worked with your Landlord before and is familiar with the standards required and the environment of your tenancy.

Building Your Space

Once you have approval from the Landlord and the necessary authorities, it is time to bring your vision to life. Effective project management is crucial, so maintain regular communication with your contractors and conduct frequent site visits to ensure work is progressing according to the approved plans and to the agreed timetable. The Landlord will likely have a Tenancy Co-ordinator as well, who will be doing the same, making sure you are on track from a delivery and timeline perspective. 

Documentation is key.  Remember to take photos and videos of the space before you start any fitout works, to record the condition and configuration of the tenancy … trust me, you will be grateful later on, that you did this!

Also continue to take photos and videos throughout the fitout process to track quality and have a record in case any future disputes arise.  Plus, it makes great social media content, bringing your clients on the journey, building anticipation for opening day!

Landlord Contributions

Your Landlords expectation in terms of standard of fitout will be outlined in the design guidelines, particularly if you are in a shopping centre environment. Sometimes this means that the investment is more significant that you were initially anticipating.  It is common for Landlords to contribute towards these fitout works, assisting you to be able to reach the standard that they are seeking for their asset. 

Financial assistance from your Landlord in the form of cash contributions or having them complete some works on your behalf, should be negotiated as part of your Lease and agreed before you sign.  This way, the terms and conditions surrounding payment of any contribution or the Landlords expectations around what the contribution will be used for, are clearly outlined and there is no confusion down the track.  

Landlord contributions are normally paid at the end of the fitout, once everything is complete, including defects.  The Landlord wants to make sure that you have built, exactly what you said you were going to build and that the premises now looks just like the plans you had approved earlier, with no shortcuts.  Be sure to plan for this, in your cashflow!

Landlords view contributions as an investment in you as a Tenant, as well as an investment in their asset, particularly if your business is expected to boost foot traffic to the area. To strengthen your negotiation position further, demonstrate how your business will positively impact the premises and possibly the surrounding businesses.

Rent Free Fitout Period

When working with your designer and fitout contractor, establish early how long it might take to complete the fitout, as you will more than likely be offered by the Landlord a rent free fitout period.  It is important to ensure that the rent free fitout period, covers the duration of the construction period.  You don’t want to be paying rent, before you start trading.  It is fairly standard for a fitout to take between 4-6 weeks, depending on the size, scale and complexity of the fitout being built.

Dismantling Your Fitout / Making Good

When your Lease term ends, you may be required to return the premises to its original condition and / or configuration, a process known as “make good.”  Planning for this should start well in advance of your Lease expiration. Familiarise yourself with the specific make good requirements in your Lease and discuss them with the Landlord, as the Landlord may be willing to reach an agreement on something different to what is in the Lease, depending on their intentions for the space when you are gone.  Either way, you should consult with experienced contractors to manage this process.  There is where the photos that you took at the start, become critical. 

Conclusion

Managing the delivery of a commercial fitout effectively is all about strategic planning, thorough communication and savvy Lease negotiations. By understanding and executing these key elements, you can create an inspiring space that aligns with your business brand and goals, while ensuring a smooth transition out of the space when your Lease expires. Keeping track of details, negotiating terms wisely and maintaining comprehensive documentation will help you bring your ideal space to life with minimal hassle end to end.

Your Leasing Co. specialises in Tenant/Landlord communication and representing Tenants to negotiate favourable lease terms.  If you have any questions or need any help to get the best outcome from your Lease, you can call us for a free, no obligation conversation on 1300 356 702.