What is tenant fit-out in an office? Our guide for Switzerland clarifies costs, rights and planning for your renovation.
You've found it: the ideal office space for your company. The location is first-class, the size is right and the building is prestigious. But when you enter the premises, you are greeted by bare concrete walls and open ceilings. There are no partition walls, no IT cabling and no sign of an inviting kitchenette. This is precisely where a crucial process begins, transforming an empty shell into a functional working environment tailored to your needs and in line with your brand: tenant fit-out.
This process is a great opportunity, but it also raises planning, financial and legal questions. What exactly is tenant fit-out, what does it involve and, crucially, what are you as a tenant actually allowed to change? This article clarifies this complex topic and shows you how to successfully design your new office.
To understand tenant fit-out, you first need to distinguish it from its counterpart, basic construction. This distinction is fundamental, as it defines which services and costs are borne by the landlord and which by the tenant.
The basic construction (often referred to as ‘shell construction’) is the landlord's responsibility. It ensures the basic usability of the space. This usually includes the load-bearing walls, the façade including windows, the roof and the primary technical connections. This means that the landlord installs the main water, electricity, heating and ventilation pipes up to a transfer point within the rented space. The floors are usually just a subfloor (screed) and the walls are unplastered. In this state, the space is functional but not yet usable as a specific office.
The tenant fit-out follows on seamlessly from the basic construction. It comprises all structural measures necessary to complete the rented ‘shell’ in accordance with the individual needs and specific requirements of the tenant. It is the refinement of the shell construction into a ready-to-move-in office that reflects the tenant's work processes, corporate culture and brand identity.
The scope of a tenant fit-out can vary greatly, but typically it covers several core areas. These range from the basic room structure to the technical infrastructure.
A central aspect is the creation of the room layout. Here, individual offices, meeting rooms, open collaboration zones and quiet areas are defined by installing lightweight walls (e.g. made of plaster) or elegant glass partitions. This structuring is crucial for the functionality of the entire office.
This is followed by the design of the surfaces. This includes laying floor coverings such as carpet, parquet or vinyl, painting the walls or applying wallpaper. Suspended ceilings, which are often installed for acoustic reasons or to conceal installations, are also part of tenant fit-outs.
Another complex and cost-intensive area is technical installations. While the landlord provides the main lines, the tenant is responsible for distribution. This includes the entire electrical installation from the main distribution board, i.e. the placement of sockets, light switches and ceiling connections. This also includes all IT cabling, from network sockets at workstations to setting up a server room. The specific lighting concept, which is tailored to the use of the various zones, also falls within this area.
Finally, custom-made fixtures and fittings are part of tenant fit-outs. The most prominent example is the installation of a kitchenette or a larger staff kitchen. The construction of a reception desk, the integration of built-in cupboards or the installation of special media technology in conference rooms are also typical measures of tenant fit-out.
Perhaps the most important question for every tenant is how much freedom they have when it comes to redesign. Swiss tenancy law (Obligationenrecht, OR) provides a clear framework here.
The golden rule is: any significant change to the rented property requires the written consent of the landlord (Art. 260a OR). Significant changes are defined as any alterations that affect the structure of the building, change the appearance of the property or could adversely affect the interests of other tenants. This clearly includes putting up walls, changes to the electrical or plumbing installations or installing a kitchen. Simply changing the colour of the walls is usually not a problem, but should also be communicated for reasons of transparency.
In practice, this means that the tenant must submit their detailed renovation plans to the landlord for review and approval. This process should take place early on during the lease negotiations.
A crucial point in these negotiations is the distribution of costs. In principle, tenant fit-outs are the responsibility of the tenant and are financed entirely by them. In a competitive market, however, landlords are often willing to contribute to the costs in order to attract an attractive, long-term tenant. This contribution, often referred to internationally as a ‘tenant improvement allowance’, is usually fixed in the lease agreement as a lump sum per square metre or as a percentage of the proven construction costs.
No less important are the provisions governing the end of the tenancy. According to the law, the landlord has the right to demand that the tenant reverse all alterations made at the tenant's expense. The office would therefore have to be restored to its original state. As this involves enormous costs, it is essential for tenants to reach a clear contractual agreement on this point. Often, complete restoration can be waived if the improvements are of benefit to a subsequent tenant. However, in practice, compensation for the tenant for the improvements financed by them is often excluded by contract.
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