Finding New Office Premises
Moving offices is a substantial, time-consuming and stressful undertaking for any business, which involves many obstacles and challenges. For most businesses, the cost implications can be daunting, not only because of the fees and capital outlay required with finding new office premises, but the indirect loss of income as a result of management time and staff resources involved in the move.
Investigate All Options First
If the prospect of finding new office premises has arisen as a result of a lease expiry, it might be worth considering renewing the lease, rather than undertaking the costly process of physically moving to new premises. Primarily, when renewing a commercial lease, it is important to establish whether the existing lease is inside or outside the Landlord and Tenant Act 1954. The implications of this can affect whether tenants have an automatic right to renew their tenancy on similar terms to the original lease, or, conversely, whether the landlord can ask for vacant possession by using a Section 25 notice. If you are unsure, it may be worth asking a solicitor or chartered surveyor such as David Charles Property Consultants, to look into this on your behalf so you are aware of your legal rights as tenants. Whichever the scenario, it may even be the case that either the landlord or the tenant does not wish to grant a new lease, and so new office premises are required.
When a decision has been made to seek new office premises, knowing where to begin can be a overwhelming, so it is a good idea to have a plan to follow with realistic timescales for each stage of the process. The plan should include at the very minimum, the following elements:
Establish New Office Requirements
The key to a successful office move is plenty of research and preparation. When scoping out the project and establishing the new premises requirements, the principal factors to consider should essentially be size, location and specification, ensuring that each element meets the requirements of the business and the team who will be based there.
- Size: The crucial thing to consider here is whether the office size will suit your business use and capacity requirements, not just now, but with future expansion plans considered, for example, are staffing levels expected to rise over the next few years? Will departments grow? Will there be an increase in inventory, storage space or equipment?
- Location: There are many factors to consider with location. In particular with commercial premises, considerations such as road access for large commercial vehicles, or road networks can be a priority. In addition to this, staff relocation may also be required, and this can prove quite costly, especially if a loss of staff could be a consequence of the move. Are you planning to relocate your office into London? This has its advantages but you do need to be aware of the risks involved such as high costs and staff commuting!
- Specification: Office layout and features can have a large impact on business operations. For example, if the business has a large storage requirement, there will need to be suitable warehouse or storage space. Other considerations would include open plan designs with communal space versus offices with separate rooms, or offices that are split across many floors.
Establishing Lease Arrangements
Before you begin your search for new office premises, it is important early on to think about what type of lease will be best for your business needs:
- Flexible leases: These are best suited to start-up companies that may need to move quickly or adapt to new office premises as the business grows. However, it is worth noting that opting for a flexible lease can involve up to 3 months’ negotiation before the contracts are signed, thus delaying the process for those in a hurry.
- Longer terms leases: These can offer more stability, and allows businesses to plan more effectively, as well as forecast long term costs. The potential drawback of long term leases however, can be issues such as unforeseen growth, increased storage requirements, or new logistical needs of the business, which would require another move within a shorter space of time than originally anticipated.
The next step of the process will need to involve a search of the market to identify potential properties for consideration that meet the criteria for new office premises set out in the initial planning stage. This can often be very time-consuming, but needs to be thorough, ensuring that all requirements are met. A property consultant such as David Charles Property Consultants will have connections and an extensive and well-established contacts database, to identify properties to meet your search criteria. Another advantage of using a property consultant is their ability to be able to approach contacts (landlords) about properties, before they are advertised or marketed, giving the client a clear advantage over others searching the marketplace.
Once the search has been conducted, a short list of premises should then be drawn up for more substantial investigation and inspection.
Following inspection of the properties, and the final shortlist identified, the negotiation process begins. It is essential to fully clarify the terms of the lease so that the negotiation process is effectual to meet your needs. The key areas to focus on as part of the negotiation process should include:
- Terms of the lease, i.e. what is the lease period and renewal rights, is there a break clause?
- Use clauses: Ensuring that the property space is suitable for the business purpose and there are no restrictions that would impact the running of the business operation
- Proposed rent: This should be up for negotiation, along with the terms such as the rent-free period and payment schedule
- Repairing obligations (both on the part of the tenant and the landlord)
- Sub-letting (or underletting) provisions
Following negotiation, the lease document will then need to be drafted by a solicitor in accordance with the agreed terms. This legal stage can be quite a lengthy process, so it is worth factoring extra time for this in the overall time plan for the office move.
Once the deal has been struck and paperwork signed, the preparations and detailed components of the actual move itself can begin. Elements such as the office design and fit-out will need to be established (often in conjunction with specialists in this field). This process will need to include all the technical requirements, data and telephones prior to the actual move. It is important not to underestimate the time and energy involved in this part of the office move process. Only once all the pre-move tasks have been organised and arranged, can the physical move (i.e. staff, equipment, inventory etc.) and all other logistical arrangements, be finalised.
If planned well, with firm parameters established from the start, the process of moving an office can be made more manageable, as well as reducing the chance of missing vital factors that could affect cost or time for the organisation and its staff. Undoubtedly, there are certain elements involved in finding new office premises that would be perhaps better managed by specialist commercial property professionals.
As Chartered Surveyors, David Charles Property Consultants have proven expertise in managing the entire process. Regulated by the Royal Institution of Chartered Surveyors (RICS), our services cover all aspects of finding new office premises, including establishing requirements, searching new office premises, negotiating lease terms and legal liaison, as well as overseeing the final logistical arrangements of the move. The fundamental advantage of this is that is takes the burden and much of the hassle away from the client, offering peace of mind so that they can continue with the day-to-day running of their business, with as little distraction and disruption as possible. For more information on how David Charles Property Consultants can help you with your office move, contact us here.