Adding value to a commercial asset through works
Preliminary technical diagnosis: 6 packages audited before any costing
A vacant floor plate costs the owner 15 to 25 €/m²/month: every week of unaddressed vacancy destroys more value than a well-calibrated refurbishment capex (150-350 €/m², ROI < 12 months). The asset manager rarely makes decisions on aesthetics: they decide on net present value, the re-letting timeframe and the Red Book valuation. Value-adding works produce these 3 effects simultaneously, provided you sequence technical audit, costed capex scenarios and documented execution. Kytom has worked since 2006 alongside property companies, SCPIs, OPCIs and property managers, with a stable methodological framework: preliminary diagnosis, scenario comparison, full-package (TCE) project management on occupied or vacant sites, and an enforceable handover file. This page sets out the method, the economic ratios drawn from our experience in French commercial offices and the regulatory scope (obligations to reduce energy consumption across the commercial building stock, acoustic standards applicable to office spaces, accessibility for people with reduced mobility under the decree of 8 December 2014) that structures every decision.
No value-adding scenario holds up without a contradictory survey of the existing conditions. The Kytom teams audit 6 structuring packages before producing any costing whatsoever: partitions and suspended ceilings, fluids, HVAC engineering, lighting, flooring, low-voltage systems. The data is cross-referenced with the asset’s regulatory diagnostics.
Documents consolidated in the audit:
- commercial DPE (energy performance certificate) and declarations;
- asbestos diagnosis prior to works (Labour Code, art. R4412-97 et seq.);
- annual electrical inspection report and safety register;
- maintenance logbook for HVAC, lifts, smoke extraction;
- acoustic audit per NF S 31-080:2006 (enclosed offices and open space);
- geometric survey to verify the structural grid (1.35 m or 1.50 m).
The commercial sector decree sets reduction targets per decade with deadlines in 2030, 2040 and 2050, expressed in relative or absolute terms. Any scenario that ignores this trajectory produces an asset that is obsolete within 5 years, discounted at valuation and exposed to stranded asset risk. The audit concludes with a 4 to 6 page summary note ranking blocking defects, penalising defects and room for manoeuvre.
When a heavy audit is not warranted. On a floor plate of less than 400 m² intended for rapid re-letting at an equivalent rent, the 6-package audit is oversized: a simplified technical condition survey on 2 packages (partitions and HVAC) is sufficient. Likewise, on an asset destined for disposal within 18 months, the cost of a full audit is generally not recovered in the sale price.
Deciding between 3 levels of capex: ratios observed in €/m²
Three levels of capex shape the value-adding strategy. The decision depends on the local market, the sector’s vacancy rate, the target tenant profile and the expected NPV over the holding period.
| Scenario | Typical scope | Capex (€/m² excl. tax) | Letting effect |
|---|---|---|---|
| Refurbishment | Paintwork, soft flooring, sanitary facilities, signage | 150 to 350 | Maintains headline rent, accelerates marketing |
| Repositioning | HVAC, DALI LED lighting, technical raised floors, lobby, accessible sanitary facilities | 600 to 1,200 | Letting value uplift, move up-market |
| Heavy restructuring | Facade, floors, asbestos removal, environmental certifications | > 1,800 | Change of building class, access to the core market |
These orders of magnitude are market benchmarks commonly observed across the Greater Paris commercial stock and in regional cities; they must be refined case by case according to the actual condition of the asset and the local letting context. A refurbishment extends marketing without changing the building class. An intermediate repositioning justifies a significant letting value uplift, particularly where the local market shows a low vacancy rate. A heavy restructuring is justified on assets held for a long time or destined for ESG repositioning, with the pursuit of environmental certifications in operation. Each scenario is delivered with an NPV at 5, 7 and 10 years and a target re-letting timeframe.
Limit of heavy restructuring. Beyond 1,800 €/m² capex, the scenario is only profitable if the residual holding period exceeds 8 years and if the local market shows a low prime vacancy rate. In a secondary location with high vacancy, restructuring produces an over-equipped asset for a rent capped by the market: prefer an intermediate repositioning at400-900 €/m².
For the asset manager: the NPV is decided in the first 90 days after vacancy
The professional reflex is to launch the technical audit as soon as the tenant leaves, then chain together contractor consultations, negotiation and works orders. This sequencing consumes 12 to 16 weeks before a single hammer blow, i.e. 3 to 4 months of lost rent (45 to 100 €/m² at the Greater Paris market rate outside the CBD).
Our reading differs from the classic sequencing. The 6-package audit and the 3-scenario costing are triggered 60 to 90 days before the effective vacancy, based on the outgoing tenant’s notice. This anticipation brings the vacancy-to-re-letting timeframe down from 7 to 9 months (professional average on floor plates > 500 m²) to 4 to 5 months. On an 850 m² floor plate at 380 €/m²/year, the difference represents 85,000 to 110,000 € of rent avoided per re-letting cycle.
What the CFO measures, what the valuer looks at:
Value-adding works are not a cost line to minimise: they are a lever for rental income and asset value to be finely sequenced. The professional consensus underestimates the effect of timing: a capex of 250 €/m² committed 60 days earlier produces 3 to 4 additional months of rent over the holding period.
Ready-to-let floor plates: 6 to 8 weeks instead of 4 to 5 months
A tenant signs all the faster when the floor plate is easy to read. Kytom prescribes neutral, reconfigurable fit-outs, calibrated to absorb the vast majority of tenant programmes without heavy reworking.
« Plug and play » fit-out standards:
This approach brings the timeframe between lease signature and move-in down to 6 to 8 weeks, compared with 4 to 5 months on a shell-and-core floor plate requiring a full tenant fit-out.
Frequently asked questions
What capex should be budgeted to reposition a commercial office floor plate?
Three ranges shape the decision: refurbishment between 150 and 350 €/m² excl. tax (paintwork, flooring, sanitary facilities) to maintain the headline rent; repositioning between 600 and 1,200 €/m² excl. tax (HVAC, DALI LED, raised floors, accessibility) to target a significant letting value uplift; heavy restructuring above 1,800 €/m² excl. tax (facade, floors, certifications) to change building class. These orders of magnitude are indicative and to be refined according to the asset’s specific characteristics. The choice depends on the local vacancy rate, the holding period and the target NPV at 5, 7 and 10 years.
When should the technical audit be triggered to limit vacancy?
60 to 90 days before the effective vacancy, based on the outgoing tenant’s notice. This anticipation makes it possible to significantly reduce the timeframe between vacancy and re-letting, thereby limiting rental vacancy and the associated rent losses. The 6-package audit and the 3-scenario costing are produced in parallel, ready for a works order as soon as the outgoing condition survey is signed.
Should the regulatory trajectory for reducing energy consumption across the commercial building stock be built into every capex scenario?
Yes, except for disposal within 18 months. The regulatory obligations applicable to the commercial building stock require -40% final consumption in 2030, -50% in 2040, -60% in 2050. A capex that ignores this trajectory produces an asset that is obsolete within 5 years, discounted at Red Book valuation and exposed to stranded asset risk. Each Kytom scenario incorporates the energy declaration, the target post-works DPE and the documented 2030 capex plan for the valuer and the investment committee.
What technical standards for a « plug and play » floor plate?
Six standards calibrated to absorb the vast majority of tenant programmes without heavy reworking: 1.35 m grid compatible with demountable modular partitions; technical raised floors with admissible load ≥ 5 kN/m²; open BMS (BACnet or KNX) with HVAC zoned by facade and by floor plate; DALI dimmable LED lighting 300-500 lux; acoustic treatment calibrated from the standard level to the high-performance level; pre-equipped RJ45 cat. 6A at a rate of 1 outlet per 8 m². Signature-to-move-in timeframe brought down to 6-8 weeks.
