The property industry has just begun to notice the sheer unrestrained waste of speculative fit-outs. But what are they going to do about it? Katie Puckett unravels the madness

Skips full of plasterboard and carpet tiles are a common sight on the streets of Britain’s cities, contributing to the 90 million tonnes of construction waste produced each year. That the industry is responsible for 20% of the total UK landfill load is bad enough, but what’s worse is that on closer inspection, those discarded materials are often brand new remnants of office fit-outs, scrapped after a handful of people have seen them.

The received wisdom in the property world is that tenants won’t take space in a building without a basic “category A” fit-out to show them how it could look with carpets and suspended ceilings. But as soon as they’ve taken the space, it’s not unusual for the occupants to start again from scratch, sending vast quantities of pristine materials to landfill.

There are no figures for how much this refurbishment contributes to the construction waste mountain, but as a rough estimate, an average spend of £75 per ft2 across 1000 ft2 uses 278 ceiling tiles, 278 raised floor tiles, 400 carpet tiles, 25 light fittings and 10 floor boxes, to say nothing of ductwork, doors, partitions, blinds, tea points and toilets. Everyone in the offices sector has been aware of this waste in time, money and resources for a while, but with sustainability now topping the industry’s to-do list, the momentum is there to put an end to it.

“If something can be done to reduce the unnecessary stripping out of category A fit-outs, that would be a big step in reducing the waste of materials,” says Richard Kauntze, chief executive of the British Council for Offices (BCO). “The degree of waste is huge and the potential to reduce that is enormous.”

The BCO launched a guide to sustainability best practice in November, and although the category A fit-out debate wasn’t included, questions were raised about it at the launch. As a result, Kauntze says it will be a top priority for the BCO in 2007.

He remembers the last time the issue bubbled to the surface in the late 1980s, before the recession derailed attempts to challenge the market. This time, however, the green agenda is not going away. “Cost was the overriding reason then. Conservation of materials and energy were fringe issues – now they’re absolutely mainstream,” he says.

Riccardo Rizzi, head of environment at fit-out specialist Overbury, agrees. “The debate’s been won. People have been talking about sustainability for the past couple of years, but 2007 is going to be about action.”

The biggest hurdle, Rizzi says, is getting everyone to agree. “It’s amazing how defensive people are. They say ‘we do it this way because we’re forced to’ or ‘this is the way it’s always been done’.”

Shell-and-core or category A?

Doing it differently means one of two things – developers not putting a “dummy” fit-out in to begin with, or occupiers making do with what’s there.

So, does it really make a difference to occupiers whether an office has concrete floors or carpet tiles if they’re going to refit it anyway? It depends which occupier you’re talking about. Large corporate firms with experienced property teams say they would rather have a building from the shell-and-core stage, with an allowance to do the category A works themselves, typically £35-40/ft2 in the City.

It’s amazing how defensive people are. They say ‘we do it this way because we’re forced to’ or ‘this is the way it’s always been done’

Riccardo Rizzi, Overbury

Gary Wingrove, head of cost management for bank UBS’ properties, says: “We don’t need to be shown what the office would look like. We’d rather design the whole thing as we need it rather than trying to do it around what’s there, where inevitably there’s a waste and we come up with a half-cocked answer.”

The debate over category A fit-outs mainly applies to offices that are built speculatively to be let to several tenants. Developers are reluctant to do anything that might narrow the market of potential occupiers.

“Leasing agents will always say that a clean, open floorplan finished to category A has improved lettability,” says Peter Cole, UK development director at developer Hammerson. “When chief executives walk around a shell-and-core building, it’s hard for them to visualise the space.”

Paul Burgess, head of London leasing at British Land, disagrees: “The onus is on us, on the supply side, to demonstrate the benefits better. There’s a lot more we can do in how we represent the space – for example using a show floor or better graphics.” He believes that if firms buy space at the shell-and-core stage, they could save £10-11/ft2.

But Cole contends that an adaptable category A finish is more sustainable in the medium term than stripping everything down to shell-and-core each time a tenant moves out. He espouses the developer’s commonly held belief that fit-out firms and occupiers are too ready to start from scratch rather than building on what’s there.

“The incoming team need to challenge themselves. It’s about good design – not making changes for change’s sake. Clients should ask themselves whether they really need to take down half the ceiling tiles or put a specialist finish on the boardroom.”

“Often, tenants are encouraged by fit-out designers to start again when it’s not necessary,” says Gerald Kaye, development director at Helical Bar, which owns property across the UK. “You could keep ceiling tiles to one side while you put up the partitions – not chuck them in the skip because they’re not the right shade of white.”

But fit-out designers complain that often developers don’t do the category A fit-outs properly. “They design them knowing they’re going to be stripped out,” says Overbury’s Rizzi. “The lights they put in, for example, can be really low quality because they know the next person will have bespoke requirements.”

Others put the onus on occupiers. When choosing a new office, they should consider a building’s fit-out requirements as they would its energy efficiency rating, says Andrew Clifford, sustainability team leader at architect Sheppard Robson. He also points out that BREEAM eco-ratings give developers points for omitting carpets but not ceiling tiles. “Speculatively developed buildings always have a ceiling, which includes the lighting, but it will always be the minimum specification.”

The shell-and-core-vs-category-A debate is going to be one of 2007’s most hotly contested topics in the property world. “People need to think not about fit-out but an intermediate solution that can be adapted in different ways,” says Steve McGuckin, director of projects at Land Securities, before getting to the heart of the problem: “At the moment, I’m not sure anyone’s looked.”