What should you look into before renting an Office Space?
What should you look into before renting an Office Space?
The spread of the global pandemic Covid-19 in early 2020 could be good or bad news for entrepreneurs, but one thing to notice is that many startups and small and medium-sized enterprises (SMEs) were founded. In addition, the lower rent compared to the pre-pandemic prompted many corporates to take this opportunity to move for better quality and newer buildings with bigger spaces at a lower rate or at the same cost. This trend is best known as the “flight to quality” which CBRE Cambodia has observed in the office market in Phnom Penh since early 2021. If you are also looking for a suitable ofﬁce space to rent, the article below is what you should look into before renting an ofﬁce space!
Trying to ﬁnd the right ofﬁce space is always tiresome and sometimes could be frustrating too. Having too many options could be confusing and having fewer choices to choose from is a headache. In order to help save time and energy when searching for a suitable ofﬁce space for rent, here is a list of things to consider before getting an office space:
Know Your Business and Identify Your Needs:
One thing tenants are recommended to do before looking for rental office space is to be well aware of the business first. By understanding or being aware of the business, tenants will have a clear goal of what the next office for the business should look like. Here is a list of questions for the tenant should go through to better scope down as well as understand their business:
“What is the nature of your business?”: answering this question, can help the tenant determine and identify what is required for the space to be suitable as the selected office. Moreover, through this approach, the process will be more convenient and efficient for the tenant to eliminate multiple selections that do not match the criteria such as the office grade, location, interior design, functionality, or whether the selected space will be used as the head office to accommodate the majority of the operation and for meeting client or just a small branch to run a normal operation.
“How big is your current team?”: this question will come in handy in cutting down costs over unused space, especially for tenants who have a budget to work with. It is also great to consider how much space that is actually required for an office to make the environment productive and efficient for the company.
“What is your budget?”: this may be a question that is overused but remains helpful still, tenants should make sure not to overspend on the rental fees as there are other expenses tenants might have to cover. It is suggested to consider office spaces that are within the budget as well as looking at the expected lease period. Being able to lock in a longer lease period could be beneficial in preventing the future increasing rental rate and taking advantage of the available incentives.
“What upgrade do you need?”: this question is especially important for those looking to change their office space. The tenant should compare the current space with their previous space to not only boost staff’s working morale but also to set a standard for the next office space when the time comes.
“What are the other requirements necessary?”: as someone looking to rent an office space, just considering only the space available and budget is not strategic enough. The tenant should also take into consideration the available parking space, safety system in case of emergencies, the surrounding environment to enhance productivity and working morale, the traveling distance to commute to and from the office, and also other factors that add to the tenant and employee’s daily convenience.
Do Your Research:
It is strongly advised that tenants do their research and explore various office space availability and not just settle on their first choice.
Look into multiple office space availability:
An important part of trying to find the right place is to research multiple office space selections to help prevent tenants from missing out on any good offers. When in a search of an office space to rent, tenants should keep the questions above in mind and consider them all together to help find their best-suited office space.
List the comparable metric and scope down the list:
After checking multiple selections, tenants should do a thorough comparison between the selected options by listing the pros and cons. This will also help in the process of eliminating spaces that are not fitted with the business. Then, it is advisable to scope down to just 3 to 5 selections at most based on certain criteria for instance interior design, the functionality and space provided, the access to the office and security, and more.
Inspection of handover conditions and building specifications:
Once again, after making the final decision on one particular office space, tenants should conduct another thorough inspection of the building quality and condition, the building age, and other specifications such as the flooring, the ceiling facility, floor-to-ceiling height, plumping system, ventilation, and air conditioning system, electrical and mechanical systems, the green certificate, etc. However, since this particular quality check inspection can require technicality and knowledge to determine the state of the building’s condition, it is also suggested that the tenant seek out professionals to lessen the burden as well as guarantee quality checks.
Check The Details:
After inspecting the site, the tenants should be able to decide which office space is suitable for them and continue to discuss the commercial terms before proceeding to the rental agreement. These are some discussions the tenant should have with the building owner or landlord:
- The responsibility for repair during rental terms: it is suggested that the landlord and the tenant have a discussion among both parties to decide who will be responsible for general repairs such as roof leaking, air-conditioning problems, or other damage to the properties accordingly.
- Maintenance fee if there are any: before deciding to rent an office space, tenants should ask beforehand if there will be an additional maintenance fee, the cost of the fee, and what the fee will be covered in order for the tenant to properly prepare their budgeting.
- Availability of security measures: tenants should also be informed of the availability of security systems within the office space such as surveillance cameras, emergency staircases, sprinklers, fire safety systems, and other forms of security measures to ensure safety for staff and office property.
- Sufficient parking space: to ensure the tenant’s efficiency of traveling and convenience, it is suggested that the tenants check to see if the new office space offers sufficient parking space for each unit. Having ample parking space is more attractive to buildings of the same grade or with the same rent as this could help the employees work more efficiently and effectively.
- Monthly utilities cost bill and other fee coverage: depending on the landlord, paying for the monthly utilities can be the responsibility of the landlord or the tenant. The coverage for the utilities usually includes the electricity and water bill but can also cover the telecom fees and internet fees as well. Therefore, it is advised that tenants have a clear discussion with the landlord about the responsibility for monthly utilities.
- Early termination conditions: may vary for different office spaces. Thus, it is essential to be aware of the terms and conditions for early terminations. For instance, early termination has to be informed at least between 3 to 6 months beforehand. Usually, the deposit fee will be charged as an early termination fee to prevent breaches of the leasing agreement. The dismal tenancy deposit policy and other procedures to be followed upon the occurrence of early termination should be agreed upon between both sides the landlord and the tenant.
- Other hidden costs: tenants should also discuss with the landlord on the possible requirements of other hidden costs which may also include insurance costs, fitting out costs, management fees, etc. These are the costs that may not be listed on the papers but the tenants will have to spend on them so that the company could be operated smoothly.
Besides the additional expenses, it is also a good idea to ask around for honest reviews and their experience when renting the office space in order to avoid any future inconvenience and complications after the decision to rent the place has been made.
Have a checklist:
The three points above involve plenty of work, hence, to prevent mistakes or omissions, it is recommended to prepare a checklist to smoothen the process. Here are the checklists that we have collected:
- Type of business (head office, branches, etc)
- Size of occupancy (Number of teams)
- Budget Allocation
- Space and environmental conditions
- Good leasing terms and conditions
- Good property management service
Trying to find an office space can be very bothersome and tiring. When there are multiples to choose from, knowing exactly what to look into before renting office space will be a big relief to tenants in search of new rental office space. For more information related to office space, please get in touch with our team: at +855 (0) 12 930 709 (Telegram/Whatsapp) or email: at [email protected].
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