The “shell and core” concept describes a method in which the building owner designs and constructs the base building. This includes the core and exterior (shell) elements, along with other construction activities, while fit-out work is left to the tenants before the building is occupied. This approach creates a blank canvas for a tenant to create a suitable workspace that meets their specific needs. Shell and core building is also called “core and shell” or “base build”.
Shell and core buildings are commonly used for offices and are often occupied by multiple tenants. Owners and tenants benefit from this approach:
- Landlords can offer flexible spaces that are modified according to tenants' needs.
- Tenants can have customized spaces without the need to develop an entire building.
The concept of shell and core originated in the USA. Before this technique was developed, building owners offered completed offices. This adaptation was often inadequate to the tenants' needs and the necessary modifications represented a waste of time and money.
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What do Shell and Core buildings include?
As mentioned above, the shell and core technique involves creating the main structural elements of a building, including walls and windows. This method does not include interior elements such as flooring and furniture. Basically, developers create the main structure and tenants customize the space to their specific style and needs. The elements included in the basic and basic provisions are:
- Foundation and structural skeleton
- Coating
- Base plan
- Completed common areas such as lobbies, receptions, stairs, bathrooms, elevators, basements, parking lots and loading docks.
- External work
- Building envelope, including insulation, external walls, glazing and roofs
Other elements generally included in core and shell projects are the following:
- Landscaping
- Pavement, paths, fences and boundary walls
- Mechanical, electrical, hydraulic, fire detection and security systems
- Signage and legal requirements
- Fire barriers
There is no standard that determines which elements should be included in a core and shell project. Therefore, the best recommendation for the tenant is to read the lease agreement carefully and hold meetings to ask questions before signing.
Fit construction
Fit-out is the process of making an interior space suitable for occupancy. This includes furniture, decoration, interior walls, flooring, mechanical installations, lighting and electrical accessories. A completed fit-out means the building is ready for use. Depending on the completion of the building and the needs of the tenant, adaptations can be of two types.
Type A Fit
This type includes retrofit elements that are completed by the owner or developer. There is no standard definition, but it may include elements such as the following:
- Raised floors and ceilings
- Mechanical and electrical services
- Internal surface finishes
- Blinds
If tenants have complex fit-out requirements, they can be involved in the main design and structural design to ensure their needs are met. This will save time and money needed to modify an existing Type A fitment.
Fit Type B
In this type of adaptation, all elements used are determined by the tenant. In other words, the developer provides a blank space to be filled in as needed. A type B adaptation involves the following:
- Offices and reception areas
- Special facilities such as meeting and conference rooms
- Kitchens
- Finishes and brand
- Audiovisual and multimedia equipment
- Furniture
Scope of Work
The lease agreement between landlord and tenant must clearly define the following aspects:
- Scope of the shell and core built by the developer. This includes spaces in common areas for tenant appliances, such as generators or refrigerators.
- Does the owner include a type A adaptation?
- What tenant equipment will be located in common areas?
Practical completion of the structure and major works must be defined by the owner's contract, which includes all requirements set out in building regulations for occupancy, except those that will be completed by tenants.
Adaptation expenses
Owners are responsible for paying for the base structure and exterior elements of the building, but are not necessarily responsible for the carpeting, flooring, lighting, air conditioning, furniture and other interior elements. All charges will be established in advance in the rental contract.
There are two common ways to complete the adjustment. One involves the landlord, who buys the materials and leaves them stacked in the tenants' spaces to be used when needed. On the other hand, some landlords don't provide the materials but offer free rentals during the renovation.
Advantages of the Shell and Core method
Each tenant requires a specific layout for workspaces, making it nearly impossible for landlords to predict their needs. As a result, landlords can waste large amounts of money on tenant spaces, which will often be demolished and redeveloped. It's more economical to leave the space empty until a tenant moves out. The main advantages of the shell and core method are as follows:
- The design and construction process becomes faster, while reducing costs and waste.
- Tenants can complete interior spaces as needed.
- Common energy efficiency elements can be incorporated into the design, offering their benefits to all tenants.
- Design flexibility
