By Luke Philpott, director of DeVono Property
The ultimate cost saving guide to to finding, negotiating and moving into the ideal office.
Any successful business needs to be housed comfortably, cost effectively and with the best lease terms. Any mistakes cost not only money and time but can also lead to loss of productivity if staff aren’t comfortable in their new working environments. It is therefore essential that companies leave nothing to chance. Office property expert, Luke Philpott explains.
Getting the timing right:
It’s not widely known that it takes an average of six months to move to a new office. This usually comprises two months of searching, two for conveyancing/ legalities and two months for the refurbishment of the new premises. So, if your business is coming to the end of its current lease, this timescale needs to be considered to avoid the danger of being temporarily ‘homeless!’
How you should brief your agent:
The starting point is the total budget for fitting and moving, to decide the maximum monthly or annual rent payable, what areas are to be considered, and how much space is required now and in future. In evaluating the size required it’s vital to factor in growth potential, especially if the company is expected to recruit new staff. Allow also for meeting rooms, communal space and storage of office essentials.
It is also important to consider how the space will reflect the image of the business and what facilities are needed by the staff. Larger companies will need to consider whether the building is DDA (Disability Discrimination Act) compliant. The answers to all these considerations should be listed in a clear brief.
Choosing an agent:
Once you have a brief, the next step is to contact specialist commercial property companies operating in the areas in which you would like to relocate to. Get to know market rental values by calling a range of agents to establish average rental prices for the area. Remember, commercial property agents also represent landlords so it’s better to work with companies that only represent tenants to give you the most objective choice and to negotiate the best monthly rental rates and most flexible lease terms.
Viewing and choosing:
A clear and detailed understanding and agreement on a number of key factors are important before a search can be undertaken. Number of employees both actual and anticipated over the medium term is obviously key, as is a budget and a shared understanding between decision makers about the length of secured lease/flexibility required. From here a more subjective requirement can be honed, to include particular geographical areas of interest and even a 'wish list' of the ideal specifics of the ideal office can be drawn up i.e. outside terrace, car parking, air conditioning, wood floors/media-esq feel, good natural light.
Once the size, budget and preferred locations are agreed upon then the search can really start. Initially this should involve your chosen agent using all of the tools at their disposal to source all relevant options, both on and off-market. Their commitment should be to show you everything suitable and as quickly as possible so that you've viewed all suitable available properties on the market at that time.
If nothing suitable has been found, put the search on hold for a week or two to allow time for new options to become available.
Once you feel that the 'right' property has been located then a building appraisal should be undertaken so that the items specific to your requirement can be weighed against the building in question. Examples of this include things like costs, power and communications supply to the building, efficiency of the actual office space and proximity to travel connections. Depending on how well the building scores on this appraisal will often either confirm that the right building has been found or the exact opposite. If the feedback from these appraisals and inspections is positive then it may well be that you have found your new offices, subject to contract!
Most people believe they can negotiate well. But in reality, it is only those who know the areas of particular importance intimately who can effectively leverage negotiations in favour of the tenant.
How many landlords themselves negotiate? Virtually none because by employing their own agent with the necessary experience they get the most out of their prospective tenant under the best conditions.
So, a company should employ their own experienced agent to counter the landlord's agent's expertise and current knowledge of recent deals done and points of negotiation.
Inexperienced tenants would struggle to negotiate on their own on issues like capping the liabilities of an FRI (full repair and insuring) lease, securing the most favorable alienation terms dealing with the yielding up provisions correctly. They will have difficulty in discussions about limiting or agreeing release mechanisms for surety or deposits, even just measuring the space correctly and ensuring that the agreed measurement is then incorporated into the lease.
These are just some of the areas to be aware of, as all of these can have very serious implications for the tenant that does not deal with them effectively.
Again, it might seem easy to design an office but this should also really be left to experts. The consequences can have a major impact.
According to The Work Foundation, 73 per cent of employees are not satisfied with the work environment at their current jobs. Furthermore, 51 per cent of employees would then go on to leave their jobs because they are dissatisfied with their work environment*. This is hugely revealing. This is not a work performance issue yet can impact on it greatly.
The statistics become even more interesting. Eighty-five per cent of UK office staff say that their working environment inhibits their creativity. A further 25 per cent of employees “have serious complaints” about various office environment factors. These figures clearly demonstrate that office space not only affects productivity, but dictates it.
While not all companies can offer lunch rooms or outside gardens, the office design plays a key role in attracting the right people to an organisation. Forty-one per cent of employees and job seekers say the office environment played a significant role in their decision to accept a position.
Architects and designers today are developing new models of working space which aim to “empower workers” by creating interaction and cross- fertilisation of ideas. The thinking behind this is to create traditional communities, social connections and professional interaction. This also means the death of the cellular office as we know it. Workspaces producing optimum results are those which allow the office to be more of a club where people are made to interact.
The Japanese concept of open plan offices, stemming back to the 1970s, is very much the successful formula of the future.
‘Magnet facilities’ — areas which will draw together all staff at some point, such tea and coffee areas and photocopiers should be set up in public areas to stimulate interaction. At the same time as investing in well-designed common areas intended for social interaction, employees most value their own defined personal workspace, ie, their own desk with reasonable storage facilities and a comfortable chair.
Most businesses will consider appointing a design & build / fit out company to handle organising the new office floor plan. These fit out companies will typically handle multiple areas such as power points being placed in the right positions, IT, board rooms, office divisions and kitchenette requirements. There are hundreds of companies offering fit out services so it’s important to look at their track records, whether they have case studies of companies whose requirement were similar to yours, and whether they are financially viable and come recommended. Check and take up the references
Informing clients and suppliers:
The simplest way to get this right is to compile a checklist of all suppliers, clients, creditors and debtors. Arrange call diverting if the original number cannot be retained.
Packing up and unpacking:
Typically office managers and PAs will coordinate this segment of the move. It is up to each individual to pack up their own desk and clearly label each box, with either a number or the individual’s name clearly marked on each box. The removal company tasked with the transportation should be given a checklist of all hardware, software, and other general items to avoid any item going astray. People will want their original chair in the new office so again it’s important to have a uniformed labelling process and labels, which will not damage any item. There are many removal companies around the UK specialising in moving between five to five hundred employees respectively. Ask them to inspect your current and new office prior to the move so they can make necessary provisions.
Getting up and running quickly:
If staff have packed carefully and marked their property clearly, and the removers follow the reference coding, then everything should be in its place and easy to unpack.
In this era, the most likely delay will probably caused by the transfer of PCs, printers and telephones. If possible, this should be planned so that the whole transfer is done over a weekend once the desks are in place.
The actual move:
Depending on size, most office moves take place over the space of one day, mostly avoiding office hours to minimise loss of productivity. While weekends are usually set aside, a number of businesses also choose to move on Friday afternoons.
Luke Philpott is the director of DeVono, a commercial property company which exclusively represents tenants looking to rent space in central London.
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