Is it more beneficial to opt for relocation, or the re-arrangement of the occupied office and renegotiation of the lease agreement? How to find out what is more advantageous for the company?

According to Walter Herz analysts, there are already over 9 million square meters of modern office space in Poland, with over 5 million sq m in Warsaw itself. In 2016 alone, about 800 thousand  sq m of offices was commissioned, and a further 1.5 million square meters of space is under construction. The selection is wide, but how to choose the best option for each company?

– In our experience, one of the most common reasons for relocation of tenants is a desire to improve access to the company. At the same time, it does not necessarily mean moving to the center, but to the building better embedded in the network of public transport than the previously occupied office. Also, the reason to move is often consolidation of branches at a single address or expansion of the company, or simply optimization of the cost of renting. The change is also dictated by branding, or transformation of work style in the company – says Mateusz Strzelecki, Associate Director at Walter Herz.

Pros and cons

To choose the best solution for the company, it is necessary to determine the expectations towards the new office and to answer a few questions. Are the changes crucial? What kind of space does the company need? How to arrange it? Which elements of the current office need to be kept, and which require a fundamental change? What arrangement will allow for effective work and will impress potential customers and future employees? What location will be the most suitable for the business? Can the company benefit from contacting other tenants in the building? New facilities often include co-working areas, enabling the exchange and cooperation between employees of companies, as well as space connecting start-ups with  more mature market operators.

– First of all, it is crucial not to exclude any option or cross out any scenarios, but to examine all possibilities – says Mateusz Strzelecki. He notes that it is also important to begin process of searching early, at least 9 months before the expiry of the current lease. This will give the opportunity to conduct a comprehensive analysis and make a careful choice of the office.

Experts also recommend analysis of the needs and preferences of workers to find the most optimal location for the future office and determine what technical conditions in terms of functionality the facility should meet. – This approach pays off, especially during rapid business changes and evolution of the nature of work, as well as in the context of competing for the best employees. Working environment should be friendly for the whole team to support productivity and creativity, reflect priorities of the company and attract talent – says Mateusz Strzelecki.

At the same time, it is worth determining how to optimize the use of office space, taking into account style of work in the company. One can plan process optimization of space only after analyzing the needs and outlining the basic guidelines for the new office. After that, the selection of appropriate recommendations by professionals who know all about the offices will be a child’s play. Comparing market options with possibilities offered by extending the agreement will bring an answer to the question of which solution to choose.

What you pay for, apart from rent

Rate per meter is not the only important thing. It is also vital to examine the additional fees related to the costs of operating and maintaining the building. Landlords charge them in different ways, so they need to be transparently calculated, which may not be so easy for less experienced tenants. Professional expertise is crucial here. Detailed comparison of the technical parameters of the buildings and finishing standards can also be challenging.

How to calculate how much will it cost us to maintain a reception, greenery in the buildings, as well as elevators and toilets? The calculated ratio for common parts is different. In addition, provisions about operating costs, which are included in every contract, may be constructed in such way that it gives the landlord an opportunity to put in them nearly everything. It is therefore important to define exactly the type of fees that constitute them. Including the fixed costs associated with specific charges of the building and variable costs, resulting mainly from the consumption of utilities and supplies. The total is calculated in the form of advances, paid per square meter of floor space.

From the first day of leasing office space, the tenant also pays for electricity and other utilities in the premises on the basis of what meters show. Since the manager has the option to choose their electricity supplier, it is legitimate to ask what rate applies in the building.

The real benefits will certainly come from the choice of space in one of the new “green” certified buildings, where environmental solutions have been applied. These types of facilities provide lower costs of energy and water consumption, as well as greater comfort. The high standard of the buildings, the use of environmentally friendly materials and access to various services provides employees and customers with working conditions conducive to well-being and creativity.

Much can be saved

When a short list of the most interesting offers is prepared, the negotiations may begin. Nowadays, tenants have a good bargaining position, so they will surely manage to get a discount  or a bonus. But to really gain a lot, the knowledge about the current situation of landlords and information about individual facilities is necessary. One should know how the commercialization of the building is going and at what stage of the investment the owner can demonstrate the greatest flexibility.

Walter Herz experts point out that there are many ways to lower the total cost of the lease. Landlords may take into account different variants from financial contributions to the budget for finishing work, to bonuses, for example in the form of parking spaces, and the possibility of using the conference center.

After meticulous calculation and comparison of individual offers it may turn out that the option with the lowest rent is not the best solution.

Author: Walter Herz