It started in London’s Shoreditch and spread throughout the regions – the defurbishment style of exposed services and natural ﬁnishes has steadily grown in popularity and it is here to stay.
Once the signature style of the tech occupier or the entrepreneur, the ‘defurb’ is now in vogue with the professional ﬁrms who traditionally opt for the white box look with clean ﬁnishes. One such example is UBS Wealth Management, who have taken the third ﬂoor of 1 St Andrew Square (3,973 sq ft), in Edinburgh.
The appeal of the ‘defurb’
Occupiers are changing and so are their needs. With the UK’s unemployment level at a 40-year low of 4.3%, staﬀ retention and attracting new staﬀ is no longer solely about wages and beneﬁts. Employers want space that is creative and engaging to get the best from their employees, and to attract younger staﬀ.
Landlords currently have little appetite for speculative new developments. One reason for this is rising construction costs following the Brexit vote, with general tender rates up by 10-12% and materials prices have risen even more. This has led to a growth in refurbishment – and the increase in popularity of the defurbishment style – to bring tired buildings back to life and into the new creative world.
The defurbishment option oﬀers landlords and developers several beneﬁts, not just to meet the new trend. It is increasingly used for refurbishments of 1960s or 1970s buildings where the slab-to-slab heights are low, meaning that traditional suspended ceilings are not an option as they reduce ceiling height too much, or do not allow for services space.
The downside of the ‘defurb’ speciﬁcation is that those exposed services such as ductwork, light ﬁttings, wiring and pipework tend to require a higher speciﬁcation, neatly installed ﬁnishes and sometimes they need to be preﬁnished, all of which increases costs.
To ‘defurb’ or not to ‘defurb’
It is a balance between a number of factors as to whether the ‘defurb’ is the right option for the landlord as costs per square metre tend to be similar overall. A good quality defurbishment can command rents on a par with Grade A space. Indeed, it is reported that £32.50 sq ft has now been achieved in the Edinburgh city centre on a ‘defurbed’ building. It is also widely reported that a whitebox (traditional) refurbishment has just achieved a rent of more than £33.00 sq ft in the core city centre.
The market is evolving and there’s a place for all styles of modern space. The factor which still remains the biggest driver for occupiers is location, location, location.