The Strategic Business Case

THE MARIS METHODOLOGY:

THE VALUE EQUATION

At Maris, we advise clients to evaluate the “Stay vs. Go” decision using a four pillar framework. This ensures the decision is based on data, not just the allure of a shiny new building.

1. The Cost Differential
Refurbishment is typically 30-50% cheaper than relocation.

• Relocation Costs: Agent fees (1-2% of rent), legal fees, Stamp Duty Land Tax (SDLT), dual rent periods, dilapidations (£15-£25 per sq ft), and the fit-out of the new shell.
• Refurbishment Costs: Primarily construction and furniture. You avoid the “exit costs” of leaving your current lease.

2. The Continuity Factor
Moving is disruptive. It involves IT migration risks, potential staff attrition (if the new location increases commute times), and a dip in productivity during the transition. Refurbishment, while requiring logistical management, preserves your location, your local amenities, and your staff’s commuting routines.

3. The ESG Advantage
The most sustainable building is the one that already exists. Demolishing a fit out and moving to a new concrete shell generates significant “Embodied Carbon.” By refurbishing, you extend the life of existing materials (flooring, ceiling grids, M&E infrastructure), significantly reducing your carbon footprint – a critical metric for modern ESG reporting.

4. The “Hidden” Potential
Many clients believe they need to move because they are “out of space.” Often, this is an illusion caused by inefficient design. By switching from a 1:1 desk ratio to an Activity-Based Working (ABW) model, you can often unlock 20-30% more capacity within your existing floorplate, saving the need for a larger, more expensive lease.

THE CFO’S CORNER:

THE “DEAD MONEY” CALCULATION

When presenting to the Board, the strongest argument for refurbishment is the reduction of non-productive spend.

Consider a hypothetical 10,000 sq ft office in London:

• Relocation Scenario: You might spend £150,000 on agents and lawyers, £200,000 on dilapidations, and £100,000 on Stamp Duty. That is £450,000 spent before you have improved the workplace for a single employee.
• Refurbishment Scenario: That same £450,000 could be invested in a high-end staff café, acoustic pods and upgraded video conferencing tech.
• The Capital Allowance Kicker: Furthermore, refurbishment projects often qualify for significant Capital Allowances. Under the “Full Expensing” regime, expenditure on new plant and machinery (e.g., upgrading your old air conditioning or installing new LED lighting) can be 100% tax-deductible in the year of purchase. This can effectively reduce the net cost of the project by up to 25%.

MARIS TOOLS:

THE “STAY VS. GO” SCORECARD

Before engaging an agent to search for new space, rate your current building against the 5 criteria below. If you can answer ‘Yes’ to at least 4/5, relocation is unlikely to deliver superior ROI. In that case, your capital is almost certainly better deployed into refurbishment rather than exit costs.

1. Location: Is it convenient for the majority of staff?

2. Capacity: Can the floorplate handle 20% headcount growth if we change the layout?

3. Infrastructure: Is the internet speed and power resilience sufficient?

4. The Landlord: Are they amenable to a lease re-gear or contribution to works?

5. ESG: Can we improve the EPC rating to ‘B’ or ‘A’ without moving?