How to lease or buy an office

Whether a tenant is looking for 100sqm or 1,000sqm office the considerations are often the same – finding a space that provides staff with a comfortable working environment to come to every day.

To most businesses, the influencing factors in finding a new office space will include: how many staff they are looking to accommodate; how they will get to work and once they are there; and the efficiency of the space they are in.

We would generally recommend a lead time of three to six months to adequately inspect available properties and work through negotiations. It is also essential that when factoring a move that the business ensures enough time to not only execute the lease but allow adequate lead time for new fit-out works to be completed.

Workplace trends to open plan offices allows communication between teams and coupled with employing green building principals to not only reduce energy consumption but improve employee health and productivity.

Base building initiatives now commonly undertaken include low VOC paint and carpet, a change to T5 lighting and maximising natural light penetration as well as cycle and shower amenities. While these changes might seem minimal, studies have shown that a healthy work environment can assist in staff retention and reduce absenteeism. 

When leasing commercial office space over 2,000sqm, request a copy of the NABERS Base/Whole Building Energy Certificate (if available) or check the NABERS rating on the Commercial Building Disclosure (CBD) website – cbd.gov.au.

From 1 November 2011, a Building Energy Efficiency Certificate (BEEC) should be made available when leasing office space over 2000sqm. This certificate includes a NABERS rating, tenancy lighting assessment and general guidance on improving the building energy efficiency.

When comparing the energy efficiency credentials of office space, pay the most attention to the current NABERS energy rating without green power. NABERS ratings are on a scale of 0-stars to 5-stars with o-stars being very poor performance, 2.5-stars being average performance and 5-stars being best building performance. 

After you have satisfied yourself with the abovementioned issues it is time to negotiate the relevant lease/purchase parameters.

Leasing
Relevant parameters include:

• Leasing rate ($/sqm) – make sure you are not paying more than the market;
• Confirm whether the rental is net or gross (outgoings excluded/included in rental);
• Ensure the lease term marries up with the size of the premises and your projected business growth;
• Consider using any negotiated incentive for fit-out purposes (preserve your equity).

Sales
Relevant parameters include:

• Contract conditions (finance or due diligence period)
• Body Corporate bylaws and contributions (if applicable);
• Potential capital expenditure (lessees are not responsible for this).

  Greg Russell is the Real Estate Institute of Queensland commercial and industrial chapter chair.