Splitting a Shop Strip Into More Tenancies: What Happens to the Power Supply?

What happens to the power supply when you split a commercial building into more tenancies? Every tenancy added to an existing single connection point increases the building's combined electrical load, so the existing service, switchboard and metering arrangement usually needs to be reassessed against the new maximum demand before any new shop or unit can be fitted out. In some cases the existing supply copes fine. In others, the landlord needs an upgraded service, a new switchboard layout, or even a revised Application for Connection to the network.

⚡ Quick Answers: Splitting a Commercial Building Into More Tenancies

• Does adding tenancies always mean a bigger electrical supply? Not always. It depends on the combined maximum demand of every tenancy added together, not just the new ones.
• Who decides if the existing supply is big enough? A licensed electrician calculates maximum demand under AS/NZS 3000, and for larger developments a Level 3 design may be required before the distributor will approve new connections.
• Does each new tenancy need its own meter? Yes. Under the Service and Installation Rules of NSW, every separately tenanted space supplied from one connection point needs its own metered and labelled service equipment.
• Can a single phase building stay single phase as tenancies multiply? Sometimes, but many landlords upgrade to three phase once several tenancies are drawing power at once, since it spreads the load and gives more headroom.
• Who pays for the upgrade? This is a commercial and lease negotiation between landlord and tenants, but the electrical assessment itself should happen before lease terms are finalised, not after.
• Does the distributor need to be involved? Yes, for most tenancy splits of any scale. Ausgrid or Endeavour Energy, or the Metering Coordinator, generally need early notice so the connection can be reassessed.

1. Why this counts as a multiple installation

Under the Service and Installation Rules of NSW, a group of small shops or offices supplied from a single connection point is specifically classed as a multiple installation, in the same category as a block of flats or a shopping mall. That classification matters because it sets the rules for how each tenancy must be separately metered, labelled and isolated, and it is the trigger for recalculating the building's overall maximum demand whenever the number of tenancies changes.

A building built for four shops was designed around the combined load those four tenancies were expected to draw. Adding four more does not just add four small loads. It changes the entire basis the original service, consumer mains and main switchboard were sized on, which is why this needs an electrical assessment rather than a straightforward fit out.

2. Recalculating maximum demand for the whole building

AS/NZS 3000's Appendix C sets out how maximum demand is calculated, using diversity factors that account for the fact that not every tenancy draws its full load at the same time. A licensed electrician reworks this calculation for the building as a whole once new tenancies are added, factoring in realistic equipment loads for each tenancy type (a cafe with cooking equipment draws very differently to a small office).

If the new combined demand sits comfortably within what the existing service was designed for, no upgrade may be needed beyond new metering and sub board work for each tenancy. If it does not, the options are usually an upgraded consumer mains and main switch, a three phase supply where the building was previously single phase, or in larger developments, a full Level 3 design submitted to the distributor.

3. Metering and switchboard work for each new tenancy

Each tenancy needs its own service protection device or meter protection device, clearly labelled so there is no confusion about which supply belongs to which unit. For a building being split into more tenancies than it was originally designed for, this usually means a larger common switchboard or a dedicated riser, with space and labelling planned before the first new tenant moves in rather than squeezed in afterwards.

Unmetered submains and any shared equipment also need to be sealed and locked in line with the distributor's requirements, and every meter panel needs permanent occupancy labelling so a reading, fault or isolation request on one tenancy never affects another.

4. Single phase or three phase as tenancies multiply

A strip that started life as a handful of single phase shops often reaches a point where three phase makes more sense once several tenancies are drawing power from one building at once. Three phase spreads the load more evenly, gives more headroom for future tenancies with heavier equipment (commercial kitchens, cool rooms, larger air conditioning), and avoids one phase becoming overloaded while another sits underused.

This is not an automatic requirement. A building with modest tenancies and a healthy single phase maximum demand can stay single phase. The decision comes down to the maximum demand calculation above, not a rule of thumb.

5. When a Level 3 design becomes worthwhile

For larger commercial subdivisions, particularly where the new combined maximum demand pushes toward or past what the existing connection can safely provide, a Level 3 design is often the more efficient path. It gives the distributor a single, fully engineered submission covering the whole building rather than piecemeal applications as each tenancy is leased, and it can identify capacity for future tenancies as well as the ones being fitted out right now.

Landlords planning to add tenancies in stages, rather than all at once, benefit most from this upfront design work, since it avoids having to reapply to the distributor every time another shop is leased.

6. Planning the timeline around leasing

The electrical assessment should happen before lease terms are agreed with new tenants, not after. A landlord who commits to a fit out date before confirming the building can actually support the new load risks delays that fall on both the landlord and the incoming tenant. Early contact with a Level 2 ASP, and where needed the distributor or Metering Coordinator, keeps the leasing timeline realistic.

Why it's Level 2 ASP work

Any work on the service protection device, consumer mains, metering arrangement or the point where the building connects to the network has to be carried out by an accredited Level 2 Authorised Service Provider. A standard electrician can fit out the inside of a new tenancy, but reassessing and altering the building's actual connection, service equipment and switchboard is Level 2 ASP territory.

How High Demand Electrical helps

High Demand Electrical is one of Sydney's most trusted Level 2 ASPs for commercial fit out and subdivision work, servicing landlords, developers and commercial property managers across Greater Sydney. We carry out the maximum demand recalculation, handle the metering and switchboard design for each new tenancy, and manage the distributor paperwork so a staged leasing timeline does not get held up by an unexpected capacity problem. If you are planning to subdivide a commercial building into more tenancies, a site assessment early in the process is the best way to avoid surprises later.

Commercial Tenancy Power Supply FAQs (Sydney)

Do I need a new Application for Connection every time I add a tenancy?

Not always, but for any change that affects the building's overall maximum demand, the distributor generally needs to be notified. Check your network area and distributor with our postcode checker before applying.

Can I fit out a new tenancy before the electrical assessment is done?

You can start interior work, but connecting power to the new tenancy should wait until the building's combined maximum demand has been confirmed. See our Level 3 design service for larger subdivisions.

What is the difference between this and a mixed use building?

A mixed use building adds residential units above existing shops, which our mixed use building power guide covers in detail. Splitting a commercial strip into more shop or office tenancies is a purely commercial scenario with different load profiles.

How long does a maximum demand recalculation take?

A straightforward recalculation can be done quickly during a site visit. Larger developments needing a full Level 3 design submission take longer, since the distributor has to review and approve it.

Planning to add tenancies to an existing commercial building? Get a Level 3 Design Quote or get a Switchboard Upgrade Quote. Call 0402 559 777 to discuss your site. Every job needs a site assessment before scope and pricing can be confirmed.