Shell and core
The concept of shell and core (or base build) originated in the USA where it was applied to office buildings built by developers for rent. USA developers initially fitted out offices, installing access floors, carpet tiles, ceilings, air conditioning and lighting on the basis of a notional layout for prospective tenants. However when the tenants came aboard, their ideas and requirements often differed from the developer’s notional layouts and so money was wasted taking down ceilings and taking up floors. Additionally, mechanical and electrical services had to be altered to accommodate varying partition layouts unique to each tenant.
Rosehaugh/Stanhope introduced a similar idea in the UK in its ground-breaking Broadgate development in the City of London. Broadgate office buildings were specifically designed for the financial markets following deregulation. Rosehaugh/Stanhope did not supply ceiling tiles, carpet tiles etc, but allocated its tenants a rent-free period and an allowance for the landlord notional element of fitting out. This became known in lease arrangements as a category A fit out allowance. Following the lead of Broadgate in the eighties, agents in the chartered surveying world accepted that rents were not affected by the principles of shell and core and it became widespread in the office commercial market.
The agreement to lease between landlord and tenant should clearly define:
- What comprises the shell and core built by the developer, including space provision in common areas for tenant equipment such as standby generators, extra chillers, or uninterrupted power supply plant.
- What constitutes category A fit out installed by the tenant but funded by the developer/landlord.
- What tenant equipment is to be installed in common areas.
 Normal shell and core provision for a high-spec city office
- Roads, paths, pavements, external lighting, security systems, fencing and boundary walls, drainage systems, incoming services, hard and soft landscaping, signage and all statutory requirements relevant to the site.
- Foundations and fire clad structure with column grid and clear structural floor heights defined.
- Building envelope, including insulation, external walls, glazing, balustrade and roofs.
- Completely finished circulation and common areas including main reception, lobbies, staircases, toilets, plant rooms, riser shafts, lift shafts, basements, loading bays and car parking. Fire compartmentation should also be part of the shell and core provision.
- All base plant, mechanical and electrical systems to plant rooms and services in shafts with air capped off by a fire damper to each tenant leased zone, electrical services connected to tenant’s zone switch panels and water and sprinkler services taken to each tenancy where they are capped off. Base plant will generally include :
- High and low voltage switchgear.
- Lift systems.
- A standby generator.
- Cooling towers.
- Water and fuel tanks.
- Sprinkler plant.
- Building control systems.
- Air conditioning chambers and fans.
- Water and fuel pumps.
- Dry risers.
- Fire detection, alarm and hose reel systems.
It not unusual for a tenant to start fitting out their demised areas prior to the completion of the landlord shell and core works, although the rent-free period (to allow the tenant to fit out category A works) will be triggered by practical completion of the shell and core works.
Practical completion of the shell and core works should be defined by certification by the landlord’s contract administrator and include all requirements under the building regulations for occupation other than those that await completion of tenant's work.
Because of the complexity of commissioning landlord and tenant's work contemporaneously, it is advisable that the setting to work of service systems and commissioning activities are carried out by an independent commissioning agency with a duty of care to both landlord and tenant.
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