Procurement · 17 May 2018

Is your working space expensive? 6 factors driving office rent sky-high

Avoid paying excessive rent on your business property by clueing yourself up on the factors driving through the roof.

The commercial property specialists LondonOffices.com have revealed the primary reasons that add to the unsolicited expenses of office rent.

Generally, the size and location of a working space will usually be the initial aspects to consider when planning a budget or negotiating rent.

Despite these factors being crucial to an office’s price, there are also other costs to consider. For example, IT infrastructure and top of the range facilities can bump up expenses

It’s important to evaluate whether these amenities are essential to the productivity of your business, because without them price estimations will drop considerably.

Commenting on this, corporate account director at LondonOffices.com, Alex Williamson said: “Many business people come to us with a very loose brief when it comes to finding a new home for their business.

“They know that the size and location of a property will play a significant role in deciding its rental value, but many fail to realise that even an office’s position in the building will be a huge deciding factor too.

To help business owners escape from paying unnecessary rates LondonOffices.com have compiled a list to educate owners on the expenses of working spaces.

Six reasons why your office rent is rocketing

Your office’s position in the building

If you’re lucky enough to work on one of the top floors in a high storey building – one which boasts panoramic views of your surroundings – you could be paying a considerable amount more than if you took an office on the lower floors.

An office at the front of a building that has access to lots of natural light will also carry a much higher premium than a rear facing office, especially compared to internal offices with no windows.

Facilities

If your office is in a building that boasts access to lots of high-quality breakout space, meeting rooms or even a luxury roof terrace, you’ll obviously be paying will be more than one without. If you’re trying to reign in your finances a little, you should perhaps consider whether these added extras are really necessary to the functionality of your business.

IT infrastructure

It’s something that a lot of business owners don’t think about unless they operate within the IT supply industries, but office buildings with top notch IT infrastructure will demand a premium. Some buildings will even have 10 gig lines, backup lines and backups to the backups! These will be more expensive than a building with basic spec IT.

Quality of the space

Simply the quality of the space will also have a big impact on rental value. A newly refurbished building with the best fit out and new aircon will always be a step up in price compared to a neighbouring 1970’s building that is starting to become dated.

Length of contract

If you are in a position to be able to commit to a 12 or 24-month contract, this would typically place you in a much stronger position to negotiate lower rents than if you were looking for a shorter term, or a rolling contract.

Occupancy of the building

New buildings with lower occupancy levels will typically have more scope for negotiation than a building that is at a higher occupancy.

Williamson added: “This information will hopefully give business owners a heads up, so they know what to expect and what to budget for when it comes to relocating or moving into serviced offices for the first time.”

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ABOUT THE EXPERT

Carly Hacon is a reporter for Business Advice. She has a BA in journalism from Kingston University, and has previously worked as a features editor for a local newspaper.

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