As a tenant, it’s natural to wonder about the cost of office space and if you’re paying too much rent. After all, commercial rent is likely to be one of your largest (if not the largest) business expenses.
Variations in commercial rental rates are influenced by a host of factors, including:
Covid-19 has flipped most markets. On the Eastern seaboard, the leasing market has depreciated and is highly competitive, which means more opportunities, higher vacancy, lower rents and higher incentives.
That means tenants with an upcoming lease expiry can usually expect to pay less than what they are paying now for comparable space.
If you have between 6-12 months before your lease expires, take full advantage of the market by conducting a stay vs relocate analysis. Here, compare what your current landlord is offering with what is available on the market to understand where and how you can save on costs.
For tenants signed onto leases with more than 12-months remaining, act now. Start planning your strategy and talk to your landlord about potentially negotiating an early renewal with revised lease terms. Or better yet, work with a tenant representative who will do the legwork for you.
As a tenant, the most important thing you can do is to conduct thorough market research for comparable office space. That means analysing the rents of office premises in your area that have a similar size, grade and purpose.
You can source this information by enlisting the help of a professional, speaking to other tenants in the area and/or jumping online to do the necessary research.
When it comes time to negotiate your lease, keep in mind that market knowledge is power and will help you secure the best possible rent deal for your office premises.
Tenant CS is a commercial tenant advisory service that caters to businesses across Australia (with a particular focus on office space in Sydney, Melbourne, Perth, Adelaide, Brisbane and Canberra), Singapore and the greater Asia-Pacific region.
We can analyse your existing or potential future office space options and lease terms to make sure you’re paying the right amount of rent for your commercial office space.We monitor national office lease markets for a living, and we’ll save you time, money and the hassle of having to do all the research yourself!