Finding the right office and negotiating
the best possible terms is a real headache for many businesses. 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
environment, it can be detrimental to morale. It
therefore essential that companies leave nothing to chance. Officeproperty expert Luke Philpott explains.
It's not widely known that it takes an average of
six months to move into a new office. This usually comprises two
months of searching, two for conveyancing/ legalities and two
months for the refurbishment of
the new premises.
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!
The starting point is to decide the total budget for fitting and moving. You must set the maximum monthly or annual rent payable, what locations 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 expecting 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.
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.
Before a search can be undertaken, a few factors
need to be worked out. 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-esqe feel, good natural light
Once the size, budget and preferred locations are agreed upon then the search can really start. Initially your chosen agent should 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
Once you feel that the 'right' property has been located then a building appraisal should be undertaken so that the items specific to your requirements 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.
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 you
really need to understand an industry or sector intimately in order
to negotiate well on the details. Make sure you choose an agent who
can effectively leverage negotiations in your favour.
How many landlords themselves negotiate? Virtually none because they employ their own agents. So, a company should employ their own experienced agent to counter the landlord's agent's expertise and who holds a current knowledge of recent deals done and points of negotiation.
Inexperienced tenants will struggle to negotiate on their own on complicated issues: capping the liabilities of an FRI (full repair and insuring) lease, for example. Or 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 can be a headache.
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.
It might seem easy to design an office but, should
plans go awry, the consequences can have a major impact.
According to The Work Foundation, 73% of employees are not satisfied with the work environment at their current jobs. Furthermore, 51% 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. 85% of UK office staff say that their working environment inhibits their creativity. A further 25% 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. 41% 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
'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 and 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.
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.
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. 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
and 500 employees respectively. Ask them to inspect your current
and new office prior to the move so they can make necessary
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.
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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