What is a tenant installation allowance? FAQ

admin November 18, 2015

Francois Staples, a Director of Galetti Knight Frank property brokers in South Africa, explains the meaning of the term “TI” (Tenant Installation) in the context of the commercial property market. Enjoy the latest in our series of Frequently Asked Questions (FAQ’s) in the real estate industry.

According to Francois, the Tenant Installation allowance is a sum of money granted to a tenant by their landlord that will allow them to fit out their new premises according to their requirements. For example, the tenant could require the installation of dry walls or air conditioning. Often, landlords will contribute towards a portion of these “startup” costs. The amount will also vary according to the length of the lease. Over longer lease periods, landlords will typically be happier to pay a greater portion of the tenant installation costs. It is important to take note of these costs and what your new landlord is willing to contribute, as this could have an effect on the premises that your company is able to afford.