A growing number of office developers in Romania are beginning to deliver to tenants unequipped, ”cold shell” space without fixtures and finishes. Meanwhile, tenants are investing at least €30 per sqm of their development budget for demolition and reconfiguration to adapt the space to specific needs and strategic plans, according to Colliers' data.
Thus, the developer’s unused budget in the” cold shell” format can be transferred to future tenants by increasing the fit-out contribution budget from the traditional €150-200 euro per sqm to €300-450 per sqm.
“The concept of renting space in cold shell format is not new, having been successfully applied for many years in the retail sector. Analyzing the data gathered in over 12 years of project management activity, we believe that the delivery of turned-key office space negatively impacts timelines and budgets, including for building developers. In addition, there are also some disadvantages in terms of environmental, social and governance (ESG) criteria, considering that office fit-outs involve the installation of materials with a high carbon footprint. In the warm shell version, part of the development has a short life span, with demolition and reconstruction increasing carbon emissions,” said Alexandru Atanasiu, Deputy Head Property Management & Construction Services at Colliers.
Regarding the prices of construction materials, the situation seems to have improved from the price peaks of 2022 and in some cases the costs have dropped by 30%.
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