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Writer's picturePeter Searle

Changing premises as you scale up



As a business grows, it invariably out grows it’s premises. The premise a business occupies in the early stages is probably not ideally suited to its needs as it grows and there is probably a desire for a building that is customised to its needs. Taking the step to a customised solution will entail some effort on your part and interaction with providers who speak another language. This blog is a brief overview of the process and the terminology you may come across. 


The overall plan. 


With any project connected with buildings it is recommended that you follow the Royal Institute of British Architects, RIBA, Plan of work. A copy can be downloaded from their web site. https://www.architecture.com/knowledge-and-resources/resources-landing-page/riba-plan-of-work 


Although there are eight stages, numbered 0 to 7, it breaks down into 4 main actions which then draw together the various work streams. 


Stage 0-3 Feasibility – high level planning, costing and scoping of the project. 

Stage 3 External approval, e.g. planning permission and legals 

Stage 4 Detailed technical design 

Stage 5-7 Construction and bringing into use. 


During the project, reference to the “RIBA stages” is a useful marker on progress. 


Stage 0-3 Feasibility – high level planning, costing and scoping of the project


During these stages the overall objectives of the project are set, budgets set and the search for a suitable property begun. Commercial Agents should be approached to find properties. In Kent the search is made easy by using the Locate in Kent website. They aggregate the majority of Agents information into one place. https://property.locateinkent.com/  


Assuming you have decided to Buy, Lease or Rent, then the next thing to consider is how much work is to be done in the building to achieve your bespoke premise. 


Buildings are generally offered in one of 4 conditions: 


  1. Shell and core, where there is nothing inside except any core areas, e.g. toilets, lifts etc 

  2. CAT A There is a level of fit out done, so in an office, this could include the ceiling, lighting and a raised access floor, but no carpet. 

  3. CAT A + this would be equipped with more features, carpets, partitions, IT.  

  4. CAT B This includes the Fixtures Fittings and Equipment. Essentially generic loose items, e.g. furniture, which would fall out the building if it was turned upside down, but not computers etc which business specific. 


The degree of fitout supplied usually depends upon the length of a lease, and size of the demise. The less that is supplied provides more flexibility for the occupier to make everything a workable space for them, but at an increased fit out cost. 


Having selected a premise, if it is to be leased, then Heads of Terms, HoT, for the agreement should be drawn up. In the HoT’s what can, and cannot, be altered should be set out, and you decide if the restrictions compromise the objectives of the project. 


The HoT’s will also set out potential costs and how they might increase in the future. Conditions to look out for are the: rent, break clauses, service charges covering communal areas and the payment of business rates. Areas which can be problematic as there are a variety of ways for paying are, utility costs and car parking. 


One other area which can cause friction is the dilapidations. i.e. the cost of repairing any damage which is “in excess of fair wear and tear” over the period of the lease when you move. Capturing an agreed “schedule of conditions” before moving in is essential. 


Another area which businesses taking a lease for the first time might not be aware of is getting way-leaves through other demised areas if say you want to bring in your own data line from outside. 


Once the HoT’s are agreed they will progress to a full legal agreement. It is becoming increasingly common to include a clause about how “greening” the building is to be dealt with. The area can be contentious once a lease is signed. The rent agreed reflects the running cost of the building at that time. If an investment is made to reduce the running cost, e.g. Low energy lighting then there are implications for both parties and how the new light is dealt with in the dilapidations.      


Stage 3 – External approvals. 


The approvals required to make alterations that are required from the landlord will be covered in a Licence to Alter, LTA. This is one of several approvals which will be required from other parties. Others might be planning permission, for signage, and building control approval, depending upon what is envisaged for the project. An architect will be able to advise on what is necessary. Having determined what approvals are required, detail design and costing can then be progressed. 


Stage 4 detailed technical design 


The detailed design starts with the layout, which can be done by a specialist architect, space planner or interior designer. With an overall plan the service requirements of where data points and electrical sockets are required can be planned. 


Further detail is then developed by drawing up Room Data Sheets, RDS, which have all the equipment on them. Deciding who is responsible for each item can be simplified using the categories defined by procurement specialists. They are: 


  • Group 1- A contractor supplies and fits e.g. data cables & floor boxes. 

  • Group 2 - The client supplies the items, but the contractor fixes them. Which might include legacy equipment from another premise.  

  • Group 3 - The client supplies and installs the items, e.g. graphics. 

 

By breaking things down, it helps to make sure nothing is missed. IT is a classic example where gaps can emerge. 

 

Stage 5-7 Construction and bringing into use


The implementation of the plan should run smoothly if the planning has been carried out in detail. The actual move into the new facilities requires as much planning, and a “moving champion” ideally should be appointed to manage the process. There are plenty of checklists on the internet covering HR issues, IT considerations and the physical equipment. A business continuity plan should be developed for the business. Again, checklists are available. It is surprising how much time it all takes, from organising access to the building, to transferring phone numbers. 

 

When a business decides it is time to get new premises there is a lot to consider. If you would like help please contact me for a no obligation discussion about how I might help.  peter.searle@ba4cs.co.uk  

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