17/06/2008
Office property expert Robert Leigh with the low-down on finding, negotiating and fitting-out a new office.
Finding the right office and negotiating the best possible terms is an essential requisite in a successful business. Any mistakes cost not only money and time but can also lead to loss of productivity if staff aren't comfortable in their new working environment. It is therefore essential that organisations leave nothing to chance.
The first very important issue to consider is timing. It's not widely known that it takes an average of six months to move into a new office. This usually comprises two months of searching, two for conveyancing/ legalities and two for the refurbishment of the new premises. So, if your business is coming to the end of its current lease, this timescale needs to be considered to avoid the danger of being temporarily 'homeless'.
When formulating your needs, the earliest decisions to be made are:
* Total budget for fitting and moving
* Maximum monthly or annual rent payable
* Location
* How much space is required now and in future.
In terms of space you need to assess the number of employees over the medium term. It is essential to factor-in growth potential, especially if the company is expected to recruit new staff. Allow for meeting rooms, communal space and storage of office essentials, and staff facilities. It is also important to consider how the space will reflect the image of the business and what facilities are needed for the staff.
Larger companies will need to determine whether the building is DDA (Disability Discrimination Act) compliant.
Once the basics have been established a more subjective requirement can be honed, to include particular geographical areas of interest and even a 'wish list' of the ideal specifics of the ideal office (for example, outside terrace, car parking, air conditioning, wood floors, plenty of natural light and so on). The results of this decision-making process should be listed in a clear brief.
Viewing and Choosing
The next step is to contact specialist commercial property companies operating in the areas to which you would like to relocate. Get to know market rental values by calling a range of agents to establish average rental prices for the area. Remember, commercial property agents also represent landlords, so it's better to work with companies that only represent tenants to give you the most objective choice and to negotiate the best monthly rental rates and most flexible lease terms.
Initially this should involve your chosen agent using all of the tools at their disposal to source all relevant options, both on and off-market. Their commitment should be to show you everything suitable as quickly as possible, enabling you to view all available properties on the market at that time.
If nothing suitable is found, put the search on hold for a week or two to allow time for new options to become available.
Once you feel that the 'right' property has been located, a building appraisal should be undertaken so that the items specific to your requirement can be weighed against the building in question. Examples of this include things like costs, power and communications supply to the building, efficiency of the office space and proximity to travel connections. If the result is positive, you might well have found your new offices, in which case the next step is to negotiate a contract.
Negotiating contracts
Not many landlords negotiate themselves. Most employ their own agent with the necessary experience to get the most out of their prospective tenant under the best conditions. So, a company involved in a lease negotiation should employ their own experienced agent to counter the landlord's agent's expertise.
Inexperienced tenants would struggle to negotiate on their own issues like capping the liabilities of an FRI (full repair and insuring) lease, securing the most favourable 'alienation terms' and dealing with the 'yielding up' provisions correctly. They will have difficulty in discussions about limiting or agreeing release mechanisms for surety or deposits, and even just measuring the space correctly and ensuring that the agreed measurement is incorporated into the lease can be tricky. All of these can have serious implications for the tenant that does not deal with them effectively.
Design and Fit-Out
Design and fit-out is another process that should be left to experts, as the consequences of getting it wrong can have a major impact. According to The Work Foundation, 73 per cent of employees are not satisfied with the work environment at their current jobs, and 51 per cent may go on to leave their jobs for this reason*. This is hugely revealing.
The statistics become even more interesting. Eighty-five per cent of UK office staff say that their working environment inhibits their creativity. A further 25 per cent of employees have serious complaints about various office environment factors. These figures clearly demonstrate that office space not only affects productivity but dictates it.
While not all companies can offer lunch rooms or outside gardens, the office design plays a key role in attracting the right people to an organisation. Forty-one per cent of employees and job seekers say the office environment played a significant role in their decision to accept a position.
Architects and designers today are developing new models of working space that aim to empower workers by enabling interaction and cross-fertilisation of ideas. The thinking behind this is to create traditional communities, social connections and professional interaction. Workspaces producing optimum results are those which utilise an open-plan design, which allows the office to be more of a club where people are almost obliged to interact. Interaction can also be promoted by locating 'magnet facilities' - areas which draw staff together, such as tea and coffee areas and photocopiers - in public areas.
It's worth considering using a fit-out company to organise the office floor plan, including such important details as placing power points in the right places. There are hundreds of companies offering fit-out services, so look at their track records, whether they have case studies of companies whose requirements were similar to yours, and whether they are financially viable and come recommended. Check the references.
Before and after the Move
Ensure you compile a checklist of all suppliers, clients, creditors and debtors informing them of the move, and arrange for call diverting if the original number cannot be retained.
When it comes to packing up and unpacking, it should be up to each individual to be tasked with packing up their own desk and clearly labelling each box, with either a number or the individual's name clearly marked on each box.
The removal company undertaking the transportation should be given a comprehensive checklist to minimise the risk of any item going astray. People will want their "own" chair in the new office, so it's important to have a uniform labelling process, using labels which will not damage any item. Ask the removal company to inspect your current and new office prior to the move so they can make necessary provisions.
Most office moves take place over the space of one day; arranging it for a weekend or Friday afternoon will minimise the loss of productivity. If staff have packed carefully and marked property clearly, and the removers follow the reference coding, then everything should be in its place and easy to unpack. Delays are most likely to be caused by the transfer of PCs, printers and telephones.
*Nathan, M. The State of the Office, London (2003): The Work Foundation
Further Information
Robert Leigh is the director of Devono, a commercial property company, which exclusively represents tenants looking to rent space in Central London. 020 7096 9911. www.devono.com