One consequence of the ongoing comedy or tragedy (or both) that is Brexit seems to be that fit-out costs are falling as contractors bid for new work. This seems to be due to a fear that the post-Brexit future for fit-out work is not as rosy as the European Research Group (aka Jacob Rees-Mogg and friends) might be suggesting.
But is a return to competitive pricing a Brexit 'bonus' or a Brexit 'penalty'?
If you get your new office fit-out done for less than the cost consultant originally estimated (that would make a change) it will definitely be a bonus. The obvious risk, however, is that if more and more fit-out jobs are won through competitive tenders the cashflow will become tight (possibly negative) and, ultimately, fit-out contractors will fail. If that were to happen your new fit-out is likely to end up costing far more. It will also take longer especially when the replacement contractor looks round site and utters the words, "I don'k know Guv, who did this lot for you? This is going to take some time to put right".
The Estates Gazette article suggests that this potential downside of keener fit-out pricing is unlikely to be felt until 2020/21. On this analysis the message must be, act quickly so your job is finished asap and before the cashflow becomes tight.
Alternatively, if you are getting 'keen' prices for your future fit-out schemes you may want to check the contractors' balance sheets more thoroughly and, if appropriate, get some financial security, i.e. a performance or guarantee bond, from the successful tenderer. If the tenderer cannot or will not provide a bond you may want to offer your job to someone else even if that does mean paying a higher price.
Of course, come the next round of the Brexit 'Punch & Judy' show in the Houses of Parliament (possibly next week) we might have a Brexit deal and businesses will know what the future is. If that were to happen the world of fit-out pricing might return to normal which, given the possible alternative, could be a Brexit 'bonus'.
The impact of Brexit on contractors could be beneficial for landlords and occupiers. New data from Cushman & Wakefield’s Occupier Fit Out Cost Guide shows category B office fit-out costs increased by just 1% between January 2018 and January 2019, compared with a 5.8% increase between Q1 2017 and Q1 2018.