Businesses need to think long-term about relocating

There are lots of opportunities for tenants at the moment with high vacancy rates, quality space on the market and landlords willing to offer incentives.

However, businesses need to weigh up the options of renewing a lease in their current location or relocating to a new space. Matthew Winter, executive of office leasing at Colliers International, says there are three things you should consider before moving your business.

Time is of the essence

Many business owners start evaluating their options six to 12 months before their lease expires, but Winter says this may not be enough time to make a decision.

He says commercial leasing contracts typically include an option period or notification clause. Tenants will often have to give notice within six to 12 months of their lease expiring. This means you will need to have done your  research so you can make an informed decision.

“When you find a suitable new premises, you will need to allow time to negotiate and agree to commercial terms, conclude the paper work and organise insurances/guarantees, engage a fit-out contractor and finalise works to the premises,” Winter says.

“This can often take months and if there is a delay at any stage, the business could be left without accommodation in the interim.”

Do your homework

If you’ve made the decision to stay in your current location, it is still important to test the market and review current market conditions to ensure that you are paying appropriate rent for your premises.

Winter says speaking with a commercial agent can take the time and stress out of finding this information. He offers obligation-free appointments where he will review your current lease arrangement, provide advice tailored to your business and highlight current market conditions and incentives on offer.

Through market research you may be surprised to discover that incentives and rents are more competitive elsewhere. This information can provide you with the evidence you need to help negotiate a better lease rate in your current location. It could also provide you with the justification to upgrade to a better premises without a substantial cost increase to your business.

Plan for the future

Winter says business owners should reflect on their  needs now and into the future. Many businesses fluctuate in size and staff. This means their requirement for space can often change and an office that seemed appropriate five years ago may not meet current needs.

“Changes in the industry, economic climate and personal circumstances may mean that you need to increase or decrease your current space. 

“You may find that your businesss has gone through significant changes in service offering so your current premises no longer offer you the amenity you need to run your business efficiently or to attract and retain the right staff. Looking at least five years into the future will help you identify what you need from a premises to meet your future business goals.”