Moving from your Commercial Tenancy?
Is your lease coming to an end? Facing the age-old question, “do I stay, or do I go?” As experienced tenant advisors, we understand how overwhelming the prospect of relocation can be. So, we’ve prepared the top 7 things you should consider when relocating your business.
1. Have a vision
The critical first step in considering a relocation is to establish your key drivers. Before you commence looking for new premises, be sure to actually spend the time to consider what you find to be the most important things for your business.
These key drivers may include;
o Location of premises
o Quality of premises (premium, high, ‘B’ Grade, secondary, etc)
o Profile/signage/naming rights
o Access to public transport
o Carparking for staff and clients/customers
o Access to amenities (shops, cafes, restaurants, etc)
o Size of the premises as your business grows
o Floor plan and fit out (e.g. open plan, number of meeting rooms, boardroom, etc)
o Expansion potential
o Occupancy costs
Once you have established the key drivers for your business, staff and clients you are then ready to commence your search for suitable premises.
2. Allow time
When considering a relocation, it is very important to give yourself sufficient time to identify, secure, fitout and relocate to new premises.
Invariably, clients have a forthcoming lease expiry whereby they are required to either vacate or commit to a new lease.
In most cases, you should start the process of looking for new accommodation twelve (12) to eighteen (18) months prior to the lease expiry. If you are considering a new build, or a building that needs major refurbishment, then the lead time may extend to 18-30 months prior to lease expiry.
3. Know the numbers
A critical step is to develop an understanding of the overall financial implications of your move.
You need to clearly understand your;
o Relocation costs to new premises
o Fit-out costs to physically make your new premises ideally suitable
o Costs to furnish the new premises
o Make good obligations at your current premises
o Branding and marketing costs to promote your move
By understanding all of these costs, it will greatly assist you in setting a realistic budget and enable you to make decisions about what you can or can’t afford.
It is very important to have a budget set before you commence new lease negotiations.
4. Know your space
When beginning the search and selection process, it is critical that you have a clear understanding of how much space you will need.
As a guide, most tenants require in the range of 10-15sqm for each employee, depending on the nature of your business and how you want your personal spaces to be set up i.e. workstations or offices, how much support spaces you need i.e. reception, waiting, storage, utilities etc. and the number of interactive spaces required i.e. meeting rooms, quiet rooms, breakout spaces and kitchen areas etc.
You also need to make sure you look for a premises that can sustain the growth of your business and/or has the flexibility to reduce in size if you need to scale back.
5. Get the right deal
Everyone wants to get the best deal when negotiating a new lease for their business, but it’s not always easy.
The appointment of a tenant advisor (like MRS Property) who has experience and in-depth market knowledge is important to ensure that all available options in the market are explored and that a sound commercial outcome is secured through the negotiation process. You only have one opportunity to negotiate a good (or bad) deal, appointing an experienced advisor should be carefully considered.
Our local market knowledge enables us to negotiate the most competitive commercial terms including annual rental reduction, lease incentives, more favourable rent review provisions, reduced reinstatement obligations, base building upgrade works amongst others.
It is important to fully understand the relevant approvals that may be required before you take occupation. Approvals in relation to planning (development plan consent / change in use), and building (building rules consent) are likely to be required and should be a condition before signing any lease documentation.
7. Professional Help
Getting the ‘right’ team on board to assist throughout the entire process is important.
The tenant advisor can assist in providing recommendations on key consultants including (but not limited to):
o Interior Architect / Interior designer – conceptual design of fitout, documentation, etc.
o Cost Consultant – value management, budgeting, review of trade packages.
o Engineer – structural alterations, mechanical, electrical services, etc.
o IT Consultant – IT Infrastructure, audio visual.
o Builder – construction.
o Project Manager – procurement, contract administration, project delivery.
o Building Certifier – building approvals.
MRS Property has extensive market knowledge and experience in the provision of tenant advisory services, we believe we are ideally positioned to assist you if you decide to consider a relocation.
To get in touch regarding your tenancy relocation, or any other queries concerning your commercial property needs, please contact our Advisory team:
Phone: +61 8 8297 2400
18 June 2019