Why Cat B Is Becoming the New Cat A: The Shift to Fitted & Managed Office Solutions

Fitted & Managed office spaces, which allow businesses to move in immediately, are rapidly becoming the market norm. To understand why Cat B is replacing Cat A as the default expectation, it helps to start with how offices have traditionally been delivered.

Historically, offices were brought to market as Cat A space, requiring tenants to fund and manage their own fit-out before occupation. This demanded significant upfront capital and often added months to the move-in timeline.

Following the Covid-19 pandemic, the market began to shift toward Cat A+ delivery. These offices included elements such as kitchens and meeting rooms, reducing some of the cost and time burden for tenants.

That shift has now gone further. Occupiers increasingly expect fully fitted Cat B space that is designed around the user experience and ready for immediate occupation.

Fitted & Managed Office Solutions: A Blurring Distinction

Fitted space refers to the physical specification of an office, while serviced or managed space relates to how that space is operated. In practice, this distinction is becoming increasingly blurred. According to Savills, by the end of H1 2025, 73% of lettings below 5,000 sq ft in Central London’s conventional office market were completed on a fitted basis, reflecting strong occupier demand for move-in-ready space.

At the same time, landlords are layering managed services onto these fitted offices and marketing them to occupiers seeking flexibility once associated almost exclusively with the flex sector. As a result, fitted and managed office products are converging, making it increasingly difficult to categorise space as either conventional or flexible, and driving deeper integration between two markets that were historically viewed as separate.

Shifting Risk Away from the Occupier

Move-in-ready delivery removes much of the complexity and execution risk traditionally borne by tenants. Businesses no longer need to coordinate designers, contractors and suppliers under multiple contracts, or absorb the cost and uncertainty of a full fit-out process.

For landlords, this shift creates the opportunity to achieve higher rents and more resilient income, often through service or management agreement structures where operators deliver the day-to-day experience while landlords retain strategic control of the asset.

As of early 2026, CBRE estimates that flexible workspace (both Serviced and Managed) accounts for around 12% of the total London office market, a share forecast to increase to approximately 20% by 2030. Despite this momentum, supply has struggled to keep pace with demand.

Why Supply Is Lagging Demand

Long lease structures, high fit-out costs and slow development cycles continue to limit how quickly traditional offices can transition to fully fitted Cat B space. As a result, demand for move-in-ready offices is growing faster than the market can currently supply them.

Alongside this imbalance, many landlords face an execution and information gap. While the direction of travel is clear, implementing the transition in a way that protects capital and improves performance remains challenging.

Converting Demand Into Performance

Kentro Real Estate addresses this gap by bringing specialist expertise across the fitted and managed office market. Its integrated Investment and Development Management platform combines investment strategy, design, development, fit-out and asset management into a single, coordinated approach.

This model has been shown to deliver 132% higher net cash flow over a ten-year hold period compared to traditional delivery, a 42% annual yield on incremental capital and a 3.5x equity multiple on incremental cost. By aligning delivery and operation with how occupiers actually transact, Kentro enables landlords to move confidently toward fitted and managed space while maintaining control, reducing execution risk and enhancing long-term returns.