How to avoid hidden building upgrade costs by selecting your new tenancy carefully.
When embarking on a fitout journey for your business, the key considerations are two-fold; space and business operation requirements, and the ability to harness culture and staff wellbeing in a way that cultivates job satisfaction and purpose.
With a new-found focus on attracting and retaining the best employees in the market following the global pandemic which resulted in flexible work options for employees, every business leader must now address several key elements when doing their building due diligence.
Here are some of the most important elements of doing your due diligence:
Floorplate Size - It goes without saying that a new workspace must be chosen to accommodate your number of employees, however, to accurately calculate the space you require involves analysing how your employees use the environment. The analysis is required around the average office attendance, how your teams interact and what variety of work settings, meeting rooms and storage is needed.
Space-Planning – In our new world of work, collaboration, culture, and communication are key. The workspace cannot be developed purely for the work settings, but also allow for adequate space for social interaction. Large breakout spaces are invaluable for keeping employees connected and can also be used for company events and gatherings for essential company communication and engagement. Also, consider what existing built environment the tenancy has; can you utilise these elements, or is there room to create flexible and movable settings that will allow you to adapt the workspace as requirements change?
Location – Choose a location that is easily accessible by public transport and ideally central, for both your employees and your clients. Although it is likely that you could secure a more favourable rental rate in city fringe options, or B-grade buildings, consider whether it works for your business and attract your employees back to the office.
Amenities & Facilities – When selecting new premises to fit your budget, there are standard grading guidelines which can assist in narrowing down a shortlist. Commercial properties are graded as Premium, A grade or B grade depending on the building's age, floorplate, location, environmental and services rating, as well as which amenities and facilities it offers. Selecting a building that has a range of amenities such as end-of-trip facilities, on-site hospitality options and parking, for example, will be beneficial to attract your employees back to the office.
Services – Assessing the building services such as the IT infrastructure, AC and electrical/mechanical capability before committing to a lease agreement can avoid unexpected and considerable costs during your fitout. Ensure that the energy efficiency, locations and the number of AC units will provide adequate climate control for your floorplate size and number of staff. Any improvements can be costly and therefore you must weigh up whether a building with a higher specification and higher rent is actually more cost-efficient than a lower-cost property that requires significant upgrades. The number of power outlets and how cabling reaches each workstation may seem insignificant, however, alterations can have a significant effect on your project budget and timeline. Every building is different, so investigating the structure, such as whether the property has raised floors or concrete floors (which make it difficult and expensive to make changes to cabling and services), is essential.
Incentives – The best advice is to get to know the local market. If there are high vacancy rates, landlords may be open to negotiation if the space you are viewing has been empty or if the market is slow. There may also be an opportunity to negotiate landlord contribution towards the fit-out, lower rent or even a rent-free or reduced period while the fitout is completed.
NB: Image source Unsplash