What is a Workplace Lease Strategy?
In commercial property, a Workplace Lease Strategy is crucial and there is no time like the present to implement this Strategy, as the long-term impacts of COVID-19 are yet to be fully understood.
What are you are trying to achieve for your business and your employees that aligns with your Company vision?
Without clear objectives you may not get the best Lease outcome. Below are some key areas to consider as part of building your Workplace Lease Strategy.
Identify the Best Office Space for Your Business
A Workplace Lease Strategy documents your needs, wants and non-essentials that allow you to build your Lease plan accordingly. Engaging with TRS to start this facilitation, will enable you to develop a robust plan to ensure you have all key factors considered, through to execution.
With the current change in environment, it is important to start with an audit of your current situation. Employee surveys, interviews and workshops will ensure you have factual content to make informed decisions. An understanding of current workplace needs and wants across your employees in different roles, departments and with varying levels of responsibility is encouraged.
COVID-19 has seen many businesses review the way in which they utilise their space, and they have reconsidered their application of flexible work practices. It is important to remember that one strategy does not suit all businesses, and you should not make decisions in haste.
In initial discussions with TRS, we understand how your office space is currently being used (pre and post COVID-19), to gain visibility on what your business needs are today and for the future. We will share how employees’ patterns of work are shifting in similar businesses. We identify future trends that could be adopted and aligned to your business needs. It is important to consider; what is ‘in trend’ now, may not be necessarily the best to execute within your workplace. Do employees working from home, result in most effective output for your business? We look at what does work or what requires refining to future proof your business.
A Workplace Lease Strategy should not only be focused on the current workplace situation. It should also look to the future of your business. Businesses are turning to innovative and technologically advanced workplaces to attract talent and support their employees. How will your Workplace Lease Strategy support new work trends and technology solutions that help employees work as efficiently as possible post COVID-19? Does this technology align with your business goals and objectives?
Understand the Current Market
The building Grade, type and timing of your office space requirement is critical. In a ‘tight’ market, where the supply is low, rents will remain high and incentives will decrease. This will usually indicate a low vacancy rate and fewer property options, with Landlords benefiting from an inflated market. Such conditions generally see company’s down-sizing or considering areas outside the CBD. We are now seeing a change from the Landlord’s market, to swing back in favour of the tenant. It is important not to rush to make decisions as the impact of COVID-19 is ongoing and benefits to tenants will continue to improve.
On the flip side when there is a larger supply (than demand), rents will be competitive, and incentives will increase. Depending on economic growth the vacancy rate will be higher than when demand is higher than supply. Post COVID-19, we are already seeing an increase in sublease and assignment space coming onto the market, where this was previously very tight.
Compare Office Space
Does the current commercial leasing market have available office space suited to your Workplace Lease Strategy?
At inspections we document potential areas for improvement for each site so this can be negotiated further with the Landlord, to achieve the best outcome for you.
Financial Reporting and Forecasting
Prepare your business for external uncertainty during this time, through rent reviews and forecasting, to ensure you are prepared to make a sound decision. For each favoured office space, a comprehensive assessment should be conducted to ensure you have selected the ideal space. The assessment should not only align to your Workplace Lease Strategy, but also to your budget. This includes a total lease cost review, factoring in not only rent, but also fitout and incentives etc.
Understanding Your Lease Terms
When signing a Lease, ensure that you are clear on the terms. The Landlord will provide you their standard lease and it will likely favour their position. It is therefore important that the unique terms to your lease are negotiated within the Heads of Agreement (HOA) and embedded into the final lease.
Clauses to consider include; ‘make good’ and rent review clauses, sub leases, assignments and increases to market rent, incentive use and term.
TRS can assist and clarify any terms that may sound rigorous to ensure that you have flexible conditions around items such as make good clauses.
We Can Help
As with any change within business, Workplace Lease Strategy implementation will be met with resistance from some parts or people in the business. Backing up the Workplace Lease Strategy with internal policies around communication, behavioural change and training will support a smooth transition.
A Workplace Lease Strategy is complex however when it’s done well, you will reap maximum rewards. A Workplace Lease Strategy supports your business’s overall strategy and goals. By joining the two from the very beginning, you can ensure they remain aligned through office revocations, Lease renewals or refurbishments.
At TRS, we will guide you through the process of Lease negotiation that aligns to your business needs. We will search the market, organise property inspections, and complete skilled negotiations to ensure your needs are met. Even if you are not intending to move offices, we can guide your negotiations towards cost saving and terms that benefit you.
Consider the type of professional advice you would take for any business expense and how important it is to receive an independent and non-conflicting service.
TRS is an independent tenant advocacy firm free from conflicts of interest.
With TRS, You Save More.