So your office lease expiry is fast approaching, and you’re suddenly faced with tackling one of your organisations largest outgoings. Help! If this is your first time dealing with an office lease expiry, you're not alone in wondering where to start. With lease terms generally running for a minimum of 3 years, even if you've been through the process before you're probably hard pressed to remember everything you learnt the last time.

Given the enormity of the task and impact of potentially making the wrong decision, it’s important to have an in depth understanding of your business goals and possible fluctuation in staff numbers so you can answer the following questions:

1. Is your office fit for purpose?

There are a few simple questions you can answer to determine whether your existing office space is right for your business:

• Is our office space the right size to accommodate our needs?
• Does our office space facilitate or limit the way we operate within it?
• Does our office space reflect who we are as a business, or as an employer?

If you also understand the role of your workplace, this will help formulate an even more detailed view. Your office can be a powerful extension of your brand and culture, is a place of learning and development through collaboration, and is becoming increasingly important in the race for talent.

2. Is your office located in the right place?

Location varies in importance depending on the type of business. Being in the right location increases your appeal as an employer, helps to retain talent, and post COVID will help to encourage your employees to make the morning commute to work. As part of any consideration to stay or go, it is wise to consider what impact a relocation will have on your current employees - significant impacts to commute times or a move to a less desirable location could result in an exodus of staff.

3. What is your budget?

For most businesses, budget is one of the biggest factors in the decision to stay or go. As one of the largest outgoings for most businesses to manage, getting it wrong can be extremely costly whether you’re entering a new lease, or even exiting an old one.

These are the key fundamentals any business approaching their lease expiry should know, as the answers form an important part of any brief for a relocation or office fitout. Answering no to either of the first two questions can influence a decision to move, but the matter of the budget holds the ultimate veto. On the other hand, a longer-term view of the budget may force a move decision to save costs.

Understand the cost of an office fitout, or how much space you might need using Ratesmith's space and budget calculator.

As a result of COVID, there has been an upswell in appetite to adapt existing office spaces to suit new ways of working. Flexible working had been promoted well before we were all forced to work from home, but this has now become mainstream. This has resulted in a need to refurbish offices even following a decision not to move, and in some cases, this is out of the usual lease cycle that would trigger a potential refurbishment.

What are the options on the table?

Businesses are now faced with more options than ever as the market has swung in their favour. Landlords are continuing to heavily invest in commercial buildings, competing for tenants who are being offered fantastic incentives that cover the cost of their office fitout plus rental deductions over their lease term. These options add another layer of complexity as companies weigh up the benefits and limitations of each option below:

1. Renewing your existing lease and refurbishing

This option could save you money, but it’s important to understand how disruptive this can be. Fitouts take longer to complete when they are planned around businesses operating from the premises. This results in additional costs and workplace health and safety constraints if the office remains open while the work is being carried out.

2. Moving into an office with an existing fitout

Fully fitted offices may have fitouts left from previous tenants, or you might sublease another company's office space. Being able to move straight into a fully fitted office has its benefits: no need to manage the office design and fitout process, no need to find the time or budget to do it yourself, and it can be a good short term option. The main compromise is that these spaces will not be tailored to the way your business works. It can be costly if businesses want to tailor the space to their specific needs, as they need to pay to demolish and rebuild areas that have already been paid for as part of their lease.

3. Moving into an office with a new fitout

Known as a "fully fitted spec suite", millions of dollars have been invested in new fitouts by landlords as they look to improve the desirability of their office spaces to compete for tenants.  Created to appeal to as many businesses as possible, these ready to move into spec suites mean you get a shiny new office, but they suffer the same downside as any other fitted option and can be limiting if you have a specific set of requirements. Like the fully fitted option above, the cost of the fitout is taken from the overall incentive, so you want to avoid any making changes if you don’t want to waste money.

4. Moving into an office requiring a new fitout

Referred to as "refurbished space", an empty office space allows businesses the benefits of working from a blank canvas - in other words, they have the ability to make it whatever they want it to be. Think of it as engaging an architect to build your dream home rather than buying a project home, every detail has been built to simplify your life and ensure you are getting the most out of every sqm of the space. With incentives easily covering the cost of an office fitout, this often costs no more than some of the alternatives above. However, more time and resource is required to build an office fitout. With so many design and fitout companies to partner with, you need to understand your project goals so you can create a structured brief, and ensure you are selecting the right design and fitout partner to get the best outcome for your business. This is the best solution for businesses that need to create a physical workspace tailored to their needs.

Need multiple quotes for your office design and fitout? Register with Ratesmiths now, submit your brief, and get connected to suppliers that are right for you.

5. Moving into co-working space

As a flexible option to accommodate unplanned growth, provide additional sites to facilitate flexible working, or businesses too small to justify taking on their own office space; co-working can be a great solution. Co-working typically becomes less compelling once businesses grow above 15 employees, as taking up their own office space becomes more cost effective.

Whatever you decide, now is the time to take advantage of incentives currently available on your lease.