Making the right move - Four easy steps to ensure a successful office move
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Making the right move Four easy steps to ensure a successful office move
Contents
Introduction4
Steps to securing your new office space 5
Determining your office space requirements 6
Assess your needs 7
Preparing a brief 8
Activity Based Working (ABW) 8
Sustainable workplaces 8
NABERS 8
Commercial Building Disclosure Program 9
Green Star 9
International Rating Tools 9
Finding the space 10
Relocation options 11
Start your search 11
Negotiating the terms of your lease 12
Incentives 13
Occupancy costs 13
Other costs to be aware of 14
Glossary of commercial terms 16
Building and moving into your new office 18
The time you should allow for a new fıt-out 19
Removal costs 20
Want to know more? 21
2.
Introduction
Steps to securing your new office
Determining your office space requirements
Conducting a needs assessment and preparing a brief
Finding the space
How to search for a property and understand the relocation options available to you
Most businesses accept that the current workplace is no longer
just a ‘facility’. It has now evolved into an essential business tool
Negotiating the lease terms
that should meet both the physical and cultural needs of Understanding commercial terms and associated costs
an organisation, delivering a bottom-line impact.
Finding the right office space for your business can be a complex
and daunting task, so we have created a guide to help demystify
the process. This guide has been designed to help you coordinate
and implement a successful office relocation and fit-out, engage
your employees and enhance business productivity.
At JLL, we understand what tenants want in
a workplace and what investors need from their real estate.
Building and moving into your new office
We will help you navigate the transaction process to enable faster Planning the time you need for a fıt-out and relocation costs
negotiations and assist in building a lasting relationship between
you and your landlord.
4. Making the right move 5.Determining
your office space
requirements
Assess your needs
The first step to securing new office space is to decide how you would like Once you have identified your reasons for moving and the outcomes you
to work and to assess the needs of your business. Your new office should are striving for, you should then consider the location you would like
support and enhance your business objectives, so consider how a relocation to be in and determine how much space you will need.
could affect those objectives.
Will new office space help you:
• Minimise or reduce occupancy costs?
• Use space more effıciently?
• Attract and retain talent?
• Enhance staff productivity?
• Differentiate or reinvigorate your firm?
• Reinforce your business strategy and brand?
• Encourage better interaction with clients and customers?
• Manage the cost of growth? Use our handy space calculator to work out how much
space you might need.
Visit www.jll.com.au/spacecalculator
6. Making the right move 7.Determining your office space requirements cont.
Preparing a brief Sustainable workplaces The NABERS rating scale ranges from 0 to 6 stars in half star increments. The current suite of Green Star rating tools evaluate buildings
A NABERS Office Base Building Energy Rating of 4.5 Stars is considered at the design stage, as built stage, and during operation (Green Star
A real estate brief will help you clarify and articulate what you need from Sustainability is an important consideration when planning a new office.
good practice, while a rating of 5 Stars considered best practice and Performance), and Green Star Communities assesses precinct
your new workplace. It will also be useful if you decide to engage a Tenant This goes beyond the design phase to include the on-going management
5.5 Stars is considered exemplary. NABERS ratings need to be recertified level developments.
Representative to help you source your premises. You can also use your and maintenance of a building and its services.
every 12 months.
brief to evaluate any premises you decide to inspect. Green Star has three rating levels: 4, 5 and 6 Star. A Green Star 5 Star
There are a number of potential benefits to selecting a sustainable
rating is considered best practice in Australia, with exemplar projects
What should be in your real estate brief? office which include: Commercial Building Disclosure Program
targeting 6 Star.
• The amount of space you require • Improved building performance The Commercial Building Disclosure (CBD) program is a Federal
• The number of employees you expect to accommodate (minimum and maximum) • Reduced operating costs Government scheme mandated by the Building Energy Efficiency International Rating Tools
• Your preferred location • Quality indoor environment Disclosure Act (CTH - 2010). The CBD program requires building owners
JLL has sustainability staff accredited in a range of international
• The building services you need • Staff recruitment and retention who are selling or leasing office space of 2,000m2 or more to provide
Green Building rating tools including LEED, Green Globes, BREEAM,
• Opening hours of your business • Improved productivity prospective buyers or tenants with a Building Energy Efficiency
Green Mark, One Planet Living and Living Building Challenge.
• Your security and access requirements • Socially responsible use of space Certificate (BEEC). A BEEC includes the building’s NABERS Energy
• IT and communications infrastructure It is important for tenants to understand the potential impact rating, a tenancy lighting assessment and general energy efficiency
• Any environmental/sustainability considerations of sustainability measures before entering lease negotiations. guidance. The NABERS Energy rating must also be prominently displayed
• Your fıt-out requirements Questions you can ask about sustainability include: as part of any advertising for the sale, lease or sublease of the space. The
• Image/quality/aesthetics BEEC must also be uploaded on the publicly accessible Building Energy
• How energy effıcient is the building, and is there an energy effıciency
• Your car parking requirements Efficiency Register website.
plan in place?
• Lease structure preferences
• Is there a green lease schedule for this building? Some buildings are exempt, including buildings which have just been built
• Timing
• What is the NABERS rating of the building? or are undergoing major refurbishments, and buildings which are less than
• Budget
• What sustainability measures will be important to my staff? 75% occupied. JLL advises affected parties to seek legal advice if unsure
• Proximity to public transport
of your obligations under the Building Energy Efficiency Act.
• Other unique needs you may have
NABERS
• Number of bicycle racks, showers, change rooms and lockers
NABERS rates the operational performance of buildings. NABERS is best Green Star
Activity Based Working (ABW) known for rating base building energy consumption, but can also Green Star is an Australian voluntary environmental rating system
Activity Based Working (ABW) is a workplace strategy that provides be used to benchmark tenancy energy, building water consumption, developed by the Green Building Council of Australia, which rates the
people with a choice of settings for a variety of workplace activities. waste generation and recycling rates and indoor environmental quality environmental design and construction features of buildings and
Rather than force individuals to undertake all their work at one setting, (i.e. thermal comfort, air quality, acoustics, lighting levels and occupant communities. It is a comprehensive rating tool which evaluates a wide
ABW allows people to physically locate themselves where it is most satisfaction). NABERS ratings are based on actual energy consumption range of environmental attributes including energy, indoor environment
suitable for them to undertake their work. To learn more about ABW, recorded over a 12 month period or other relevant empirical measurements. quality, water, materials, transport, land use & ecology, emissions,
visit www.jll.com.au/worksmart management and innovation.
8. Making the right move 9.Finding the space
Securing the right space is critical to the success of your business. The table below indicates some of the different lease options
Once you have prepared your brief, the next step is to start actively you could take. The availability of alternative premises will also
searching for space. At this point, you should ask yourself: “Can my influence your final strategy.
existing premises fulfil my business needs?” (for example, if a new fit-out
were to be undertaken). If yes, you could seek to negotiate a lease renewal. Start your search
If not, you will need to look for new premises. The easiest place to start your property search is online.
Visit www.jll.com.au/properties for our available properties.
Relocation options Alternatively, contact a JLL agent in your city who will discuss
The length of time required to plan your move will depend on the size of your requirements and help you make the right move.
your premises, the specifics of your requirement and the prevailing market
circumstances. The greater the period allowed, however, the greater will
be the range of available choices.
Option Advantages Limitations
Renew the lease at your existing premises • Avoids disruption to your business • Dependent upon achieving a suitable deal with your
• No relocation costs existing landlord
• Maintains the relationship with your existing landlord • The office fıt-out may be tired or ineffıcient
Renew the lease at your existing premises and • Maintains the relationship with your existing landlord • Involves some disruption and cost
undertake a new fıt-out
Move to an existing building with a suitable fıt-out • An opportunity to improve your business location • The fıt-out you are inheriting will not be tailored to your business
• You will be able to commence work immediately
• Costs will be limited to relocation only
Move to an existing building and undertake • An opportunity to improve your business location • Depending on the age of the building, there may be some
a new fıt-out • A fıt-out can be tailored to suit your business requirements limitations in workplace flexibility or services
• Some costs may be negated through incentives in your lease • Signifıcant cost and investment of time required
contract
Pre-commit to a new building • Premises can be built to suit your specific business requirements • A much longer time frame is required
• Construction risk = business risk for timing of move
• You would need to commit to a large space, so this generally
only suits larger tenants
10. Making the right move 11.Negotiating
the terms of
your lease
When the time comes to negotiate your lease, there are a few important Occupancy costs
terms that you should familiarise yourself with. We have included a
summary of these terms in this guide. If you wish to seek further advice, Before negotiating your lease, you should familiarise yourself with
you can speak to a Tenant Representative who can assist you when some occupancy costs that you may be responsible for.
negotiating the terms of the lease (also called ‘Heads of Terms’).
You should also seek legal advice when finalising the lease document.
Outgoings/service charge
This is the collective name for the costs associated with the general
Incentives running of a building that the landlord charges to the tenant, including
but not limited to:
It has become more common for landlords to offer incentives to tenants
during the lease negotiation period. The scale of an incentive will largely • Building insurance • Rates and taxes
depend on the market conditions at a given point in time and the eagerness
• Air conditioning • Water
of a landlord to lease space to a particular tenant. Incentives can take the
form of rent-free periods, capital contributions towards fit-out or a • Management fees • Maintenance
reduction of the face rent. You may need to obtain tax advice prior to This fee is charged to the tenant on a per square metre basis under a net
negotiating this aspect of your deal.
rent arrangement, or included in the square metre rent under a gross rent
arrangement. If outgoings are applied under a gross rental arrangement,
then an audited annual statement determines any adjustment required.
12. Making the right move 13.Negotiating the terms of your lease cont.
Utilities Other costs to be aware of However, if a tenant uses the services of an agent or a tenant representative
Electricity and telecommunication consumption of an individual tenant for themselves, a negotiated fee would be payable by that tenant to the
Tax retained agent.
are metered separately and paid directly by each tenant. In some states,
Local government rates and land tax are charged to the building owner
the landlord bulk buys electricity for the whole building and resells to Tenant Representatives
and, in most cases, recovered from the tenants through the outgoings
each tenant at the prevailing electricity trust charges. Water rates are You may choose to appoint a Tenant Representative (TR) to represent your
charge. A Goods and Services Tax (currently 10%) is payable on all rents
charged to the building owner and recovered from the tenants through interests throughout the search and negotiation process. You should ensure
and outgoings.
the outgoings charge. that the TR is a licensed agent, and that he or she is fully retained by you
Legal fees and is not seeking separate payment from the landlord. You should vet and
Insurance
Legal fees vary depending on the complexity of lease negotiation, the size approve all correspondence issued by the TR on your behalf, and
Insurance for the building structure is arranged by the building owner and,
of the premises or the amount of the annual rental. Tenants are responsible specifically ensure that his or her ‘retained’ fee basis is communicated
in most cases, charged back to the tenants through the outgoings charge.
for their legal costs. The tenant has traditionally been responsible for the to prospective landlords and their agents.
Cleaning landlord’s legal fees in drawing up the lease contract, but this practice is
The majority of leases are exclusive of tenancy cleaning charges but this now changing with it becoming common for each party to pay their own Car parking
should be clarified when negotiating the lease terms. In most circumstances, legal costs. If car parking is available in the chosen building, there will be a separate
the cleaning of a building is undertaken by a contract cleaner nominated by charge over and above the rental for the office space. Car parking is usually
Make good—new and old premises under a separate license agreement and does not form part of the lease
the landlord.
Most leases contain a ‘make good’ clause, whereby the tenant is bound document for the office accommodation. Some local CBD councils have
to restore the premises to its original condition prior to vacating. This introduced a car park levy on top of commercial car parking fees.
obligates the tenant to remove any fit-out or other improvements to the The landlord will normally pass this onto the tenant and include it in the
premises and restore building services to their original layout. monthly car park charges. The car parking charges are levied on a monthly
Bank guarantees/securities basis and are generally subject to a review of the market rates at the
The landlord will generally require some form of security from the tenant licensor’s discretion, normally on an annual basis.
to guarantee the latter’s financial obligations under the lease. The security
can take a number of forms, but the landlord will usually require the tenant
to provide a bank guarantee. The amount of the bank guarantee will vary
according to the market circumstances, but will generally range from three to
nine months’ gross rental equivalent, plus additional security for associated
incentive amounts.
Agent fees
The leasing agent’s fee (normally expressed as a percentage of the average
annual rental over any tenancy) is nearly always paid by the landlord.
14. Making the right move 15.Repairs
The landlord is liable for external and common parts maintenance, with
costs charged back to the tenant through the outgoings. The landlord is
responsible for all repairs of a capital nature.
The tenant is responsible for the internal repairs to their premises.
A ‘redecoration clause’ is usually included, requiring a tenant to paint
We have provided a short explanation of some common commercial terms you all internal walls at specified intervals.
may encounter. Sub-letting and assignment
Quotation of floor area Leases usually allow the tenant to dispose of the premises through the
Net Lettable Area (NLA) is measured from the internal finished surface of permanent assignment of the lease or sub-letting, provided that the new tenant and
walls and the dominant portion of permanent outer building walls. Columns and the terms are acceptable to the landlord.
window frames are included. Stairs lifts and common areas are excluded, unless they The landlord usually cannot unreasonably withhold consent. The tenant
are part of the tenant’s fit-out. This method is used for calculating areas and carrying would normally be responsible for the landlord’s costs in approving the
out operating cost analysis in commercial office buildings. assignment/sub-letting.
Gross Lettable Area (GLA) is measured from the outside face of external walls and Early termination
to the centre line of inter-tenancy walls, partitions or common areas. This method is Early termination of a lease is not usually provided for, although this
used for measuring warehouses, industrial buildings and offices within those buildings. provision may be accommodated, subject to a suitable penalty payment.
Lease period Security of tenure
New leases are generally an initial term of between three and ten years. Further terms In most cases, tenants do not have any statutory rights to renew the lease
or option periods can also be negotiated. at the end of the term. The only way of guaranteeing a new lease is to
Net rent and gross rent negotiate an option in the initial lease negotiation.
The rent payable on a property includes the rental amount and the outgoings charges. Hours of operation
A net rent amount does not include outgoings and these charges are payable in addition Most commercial office buildings offer security and tenant access 24 hours
to the net rent amount quoted. If a gross rent is quoted, outgoings charges have been per day, seven days per week. Public access is generally allowed between
included in this figure. 8am-6pm. After hours charges are normally applied for the provision of air
Rent reviews conditioning outside 8am–6pm.
Rent reviews are generally conducted at one or two yearly intervals throughout the Stamp duty
term of the lease and at the commencement of any option period. There may be stamp duty consequences that flow from the lease.
Rent is usually reviewed to a market value figure no less than that being paid at the We suggest that you speak to your tax advisor for further information
time of the review, although the market value can vary according to local market about stamp duty in your state.
conditions. Alternatively, there may be a fixed increase or an increase linked to the
Consumer Price Index (CPI).
16. Making the right move 17.Building and
moving into
your new office
The final phase in securing your new office premises includes the
200-500 501-2,000 2,001-5,000 5,001-7,500 7,501
fit-out of your space, if required, and organising the relocation. sqm sqm sqm sqm sqm plus
Detailing your 2 weeks 2 weeks 2-4 weeks 4 weeks 4 weeks
The time you should allow for a new fit-out requirements (Brief)
It is important to allow significant time for the fit-out to
Design phase 6 weeks 8-10 weeks 10-12 12 weeks 12-14
avoid costly mistakes. Detailed design management will reduce the cost weeks weeks
of unexpected variations at the construction phase. Fit-out times can be
Tender and 8-10 weeks 12-18 18-28 26-32 32-36
compressed if sufficient resources are allocated by your own team, the construction weeks weeks weeks weeks
designer and the contractor. The following table indicates the lead time
Approximate 16-18 22-30 30-44 42-48 48-54
you need to consider.
overall duration weeks weeks weeks weeks weeks
These time frames are approximate and intended as a general guide only.
18. Making the right move 19.Building and moving
into your new office cont. Want to know more?
Removal costs If you need more assistance, please contact a member of the Leasing team
at JLL. With locations in all of the major CBD markets, we can offer
You will generally be responsible for all removal costs associated with the
expertise and tailored solutions to ensure you make the right move.
office move. Once you have secured your new office, you should contact a
recognised removalist capable of transporting all of your office equipment. Adelaide 08 8233 8888
Appropriate transport insurance should be arranged before the actual
Brisbane 07 3231 1311
move, and all equipment leases should be reviewed to ensure that you have
the right to disconnect equipment and relocate it. In certain circumstances, Canberra 02 6274 9888
the equipment can only be moved by the manufacturer.
Glen Waverley 03 9565 6666
To establish an accurate cost of relocation, you should take into account:
• The time of relocation (e.g. weekday or weekend) Mascot 02 9693 9800
• Access to loading zones at both the old and new location
Melbourne 03 9672 6666
• Access to lifts
Brisbane
• Building caretaker and security involvement North Sydney 02 9936 5888
• Rent at two locations
• Transit costs Parramatta 02 9806 2800 Perth
• Identifıcation of equipment, such as computers, safes and furniture
Perth 08 9322 5111 Sydney
• IT consultant costs Adelaide Canberra
• Physical removalists
Sydney 02 9220 8500
• Make good costs
• Builder’s works
Melbourne
www.jll.com.au/makingtherightmove
20. Making the right move 21.Notes
Disclaimer
The material herein is intended as a guide only. No liability for
negligence or otherwise is assumed for the material contained herein
by JLL, its principal or its servants or its agents. No material contained
herein shall form the basis of or be part of any agreement and no warranty
is given or implied as to the accuracy of the whole or any part of the
material. Prospective tenants should not rely on the material, but should
make their own enquiries and satisfy themselves of all aspects of the
material. Any liability by JLL, its principal, its servants or its agents in any
way connected with the brochure, whether or not such liability results
from or involves negligence, will not exceed AUD 1,000.
JLS0293
22.www.jll.com.au/makingtherightmove
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