Stay versus go?

This is the second article in the series: End-to-End Circular Fit-Outs

For office tenants with a lease coming to an end, the question of whether to stay in an existing space or move to a new one has always been complex, but today, with cost pressures, market constraints and sustainability commitments, the decision carries even more weight.

The choice is no longer framed simply as stay or go, but as an opportunity to think about the existing value in a space and how a circular approach can unlock it.

Circular fit-outs, once peripheral, are increasingly shaping these conversations, and forward-thinking occupiers are beginning to catalogue their assets, assessing what can be carried forward rather than replaced – whether they decide to move or stay in their current space.

“We’re starting to see clients think five years ahead,” says Johana Rodriguez, Sustainability Manager, JLL Design Lab. “They want to understand their inventory and see how much of it they can bring with them if they move. It’s a powerful shift in mindset, one that recognises the value of what already exists and embraces long-term circular thinking.”

In either scenario – stay or go – some waste is inevitable, but owning the responsibility matters.

“Every occupier should acknowledge that they have a responsibility to ensure their existing office fit-out is dealt with sustainably,” adds Laura Wardrope, Associate Project Manager, Occupier Fit-Out, JLL. “We need to get out of the mindset of passing that responsibility on.”

Circularity is only part of the equation. Occupiers and landlords must also strike a balance between meeting broader long-term sustainability goals and limiting waste in the short term. Getting this right relies on robust technical due diligence at the earliest stages of a stay versus go decision.

“This is an exercise we carry out as part of sustainability due diligence,” says Areti Makantasi, Director of Sustainable Asset Services, JLL. “We look at the occupier’s objectives holistically. Does existing equipment meet energy performance requirements, or should we repurpose this equipment and specify new to meet decarbonisation and energy efficiency targets? These are decisions that need to be made with a holistic view.”

Designing a fit-out with circular principles from the outset makes future decisions easier, creates more adaptable spaces, and highlights what can be reused at the earliest opportunity.

Yet, sometimes, circularity and decarbonisation goals can pull occupiers and landlords in opposite directions.

“We worked with a tenant who had perfectly functioning equipment in their current space which they wanted to move to their new space, but the equipment didn't meet the EUI requirements of the landlord,” says Kirsty Draper, Head of Sustainability – Leasing Advisory, JLL UK.

"In this case, we collaborated with the landlord to amend the lease terms to enable the reuse of this equipment, which was great from a circularity perspective. When that system reaches end of life, the tenant can look to upgrade the system. It's a good example of some of the conflicts we see—there's no one-size-fits-all solution for these situations. Each decision needs to be made from an informed position, which our teams can help with."

Early engagement between landlords and occupiers can help to avoid delays, minimise embodied carbon and maximise efficiencies.

But leases have their limitations. Jon Rowling, Head of Dilapidations at JLL UK, explains: "It's very difficult to incorporate effective sustainability-driven yield up terms in leases. This is largely because they require landlord-tenant collaboration at a time when their interests are fundamentally opposed – landlords want to maximise dilapidations settlements while tenants want to minimise them."

The most effective solution is to avoid dilapidations disputes altogether. This is best achieved by applying circularity principles and fostering collaboration during the design stage, when both parties still have a working relationship to maintain. "Testing whether creative design or technical upgrades could deliver the same result without the upheaval of relocation is another option, but it means occupiers need in-depth assessments to understand what they can do with what they already have," Rowling adds.

“It really becomes critical to do the technical due diligence properly because there are so many layers of complexity,” Wardrope says. “But sometimes clients aren’t willing to invest the time and fees needed to get professionals in place for this critical evaluation.”

Alongside sustainability pressures, market dynamics are changing lease decisions, forcing circularity up the agenda. Large corporates in London, for example, may need six years of forward planning to identify and secure the right space, while smaller occupiers can often work on a two-year horizon, which still requires significant foresight.

With rent increases, higher fit-out costs and business disruption to consider, more organisations are choosing to stay put. “Our re-gear rates have gone up really significantly,” says Draper. A recent survey by JLL indicated that at lease expiry, over 80% of tenants in EMEA are now more likely to re-gear existing commitments, up from the long-term average of around 65-70%.

“Exploring whether you can get the space to work for you where you are, and how much you can reuse, could save both cost and carbon.”

Changing work habits post-Covid are also driving organisations to rethink their space requirements, but it isn’t always about downsizing. Several high-profile corporates reduced their footprint post-Covid and now need more space as hybrid work patterns shift.

For occupiers facing their next lease event, the real decision is not simply whether to stay or go – it’s whether to think and act in a more circular way.

Circularity can protect what already exists, reduce waste and align with sustainability goals, but it only works if occupiers engage early with landlords, gather robust data on assets and services, and consider the full implications of each option.

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This article is part of our series dedicated to applying circular economy principles to office fit-outs, helping you deliver projects with significant environmental and commercial benefits. Explore the full series and download our practical guide:

• Why circular fit-outs make environmental and commercial sense