Victoria House, Bloomsbury Square, London, WC1B 4DA
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14th June 2021 | 6 min read
Searching for office space can be a formidable task whether it’s an entirely new home for the business or extra space to house a project team.To help make this process easier to understand and create a better experience we’ve put together a step-by-step guide, beginning with the key things you really should know before embarking on your search for office space.
What to know before starting your office search
With a wide range of offices to choose from with varying terms and contractual arrangements the first step, according to Ed Nicholson, Head of Office Leasing London for LabTech, is to work out what it is you actually need the office space for and what will suit the business best.
“Before starting your search, you should determine what exactly it is you want, where you want to be located, your occupation date and for how long you want to be in that space,” he says.
Georgina Willoughby, Landlord Partnerships Lead at Hubble, adds that we are now in the era when employees will have “a much bigger influence over real estate decisions. Businesses whose office plans are at odds with their employees’ preferences are likely to struggle with hiring and retention.”
“Listening to your team’s needs is an important part of the office search process,” she adds. “Once you’ve got these insights, you can work out how to make them compatible with your business’ fundamental needs and constraints and use that to form your search criteria.”
One of the main factors that needs to be decided upon prior to starting an office search is where that space needs to be situated. A travel study may need to be conducted to understand where everyone who will be based in the workspace commutes from. This could impact also whether the office space you need has to have access to bike racks, lockers, showers and drying rooms. Another consideration will be accessibility to and for clients, as well as if there is a desire to be in close proximity to similar businesses.
“You will need to decide if it is more important to be close to good transport links and local amenity or if the office itself is the key driver,” Ed explains.
It’s also worth remembering that office space pricing varies between locations and the different types of offices on offer office, which can be a significant factor. So, knowing your budget limits is also key.
Types of office space
Office space solutions range from what is called Cat A, essentially an empty shell with its own front door that must be designed and fitted out by the tenant alone, to a managed option where the tenant specifies to the operator of the office or the landlord what the empty space needs to be filled with, including the number of desks and chairs, and pick from a selection of finishes offered, to already fully kitted out space delivered by an operator or the landlord. You could also choose to stick with the fit out of a previous occupier.
You will also need to understand what facilities you require, Georgina says. She adds that if a business is looking at a more hybrid working solution and is planning to move to a smaller headquarters, for example, then you will need to know what on-demand facilities the business might need such as event space, local co-working spaces or meeting rooms.
These different types of office space generally come with different leasing arrangements. There is the ‘traditional’ lease, which requires you to pay rent and service charge to the landlord and business rates to the local authority, utilities are charged separately.
Whilst pricing for flexible lease offerings typically reflects an ‘all in cost’ that includes the rent, service charge, business rates and the fit out, meeting room access and office management charges.
If flex space is what you want then you need to understand that “flexible offices tend to have varying personalities and cultures,” Amanda Lim, Partner and Head of Flexible Office Solutions at Knight Frank, says.
“You should identify the type of corporate brand and message that you want to signal to your clients and staff. That will help determine whether you want a super trendy office full of businesses at similar stages to yours, or a more private, high-end work environment,” she adds.
You can also sublet from an existing tenant. This usually involves taking over the lease liability from the current tenant of the office space. It can be a useful route if you are looking to occupy somewhere quickly or short-term.
How much space?
Another essential piece of information to know is how much space you will need and if you will require the ability to expand or contract in the future.
Lim explains: “It’s important to think about the number of desks you need. In a post-Covid world of work, the number of desks you require won’t always equate to the number of people you have. It depends on your firm’s stance on flexible working and how they plan to get the most out of their space. I’d recommend working out the minimum number of desks you will need on any given day – accounting for team sizes, rotas and your employees preferred working styles.”
This may also mean you need to consider desk space ratios prior to the pandemic the average was around 50 sq ft per desk, with another 50 sq ft per person to accommodate them in communal areas. However, social distancing requirements have seen this increase and going forwards employees are likely to require more room around them.
For how long?
Determining the length of lease you require could also determine what options are available to you. Traditional leases directly from a landlord are typically between 5-10 years long and usually include break options. These tend to be at three or five years into the contract and allow either the tenant and/or landlord the flexibility to terminate the contract prior to its expiration date.
Shorter leases and extra flexibility can come with a rental premium so understanding what lease flexibility your business requires is very important.
Timing is everything
The process to identify, negotiate and complete the necessary legal paperwork for office space can take up to 24 months, depending on the type of office space you require, how much space you need, when you need your workspace by, as well as the property market dynamics at the time.
However, choosing to take already fitted out office space can help speed up the acquisition and occupation processes, as can going for a flex or managed solution.
If moving from another office space it’s also worth remembering that there may be requirements for exiting that space whether it handing it back to the landlord in a the state it was originally taken in or disposing of the remaining lease liability.
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