When fitting-out and moving into your new workplace, it is advisable to give some thought to longer-term considerations about how you will operate in the space and how it can best continue to serve your needs.
Part of this involves decisions that you take at the outset of your occupancy but you should also be periodically (at least twice a year) evaluating how well your workplace is supporting your business and what, if any, changes need to be made. Futureproofing measures to consider prior to taking occupation.
The future flexibility offered by your workplace will be largely defined by the terms of your lease. So it makes sense to incorporate as much flexibility into your lease as you think you may need. Flexibility is important to some occupiers but certainty of expenditure is also a vital part of business planning.
Accordingly, some occupiers – who predominantly want flexibility – may be particularly interested in their future ability to exit the space while others may be attracted by the idea of, for example, fixed/stepped rents throughout the lease term.
When trying to incorporate flexibility into your lease remember that having options in your lease such as break clauses can result in paying a higher rent as the landlord will seek to protect their investment position. So do not ask for all the measures discussed here if you do not think there is a good chance of your business requiring them.
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Lease characteristics to consider when thinking of your business’s future needs include:
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- Break options: if you think there may be a compelling reason for you to vacate the workplace before expiry of the lease you can try and negotiate "break-options" whereby at set times you can give notice to terminate the lease early. Be aware that your landlord may also seek to regain control of your space early, in which case they may look to make the break clause 'mutual'; i.e. either party can exercise the break on the same date, subject to the right notice being served.
- If you think your business is going to grow in the medium term and you may need more space but don’t want to move, try and get a "right of first refusal" option on available adjacent space. Depending upon your view of where market rents are heading, you may think about trying to reach a pre-agreed future rent which will be payable for that space.
- If you think you may need to change the configuration of your workplace regularly (introducing new partitioning etc), negotiate alteration rights with minimal need for landlord’s consent.
- If you can envisage needing to sub-let your space or having to assign your lease at some point, try and negotiate the least onerous requirements for doing this.
- If keeping tight control over expenditure is a priority for your business and you do not like the uncertainty of future rent reviews, you may want to consider fixed or stepped rents during the term of your lease. Similarly you may look to place a "cap" on service charge payments for an agreed period of time.
- If a landlord is willing, it may be possible to "commute" some or all of an incentive package (for example, the rent-free period) into a, respectively, lower rent, thereby reducing quarterly outgoings.
Future-proofing factors to consider when in occupation
The manner in which you occupy your workplace has ramifications for the future. You should develop a culture of active workplace management where the quality and efficiency of your working environment is regularly reviewed.
To stop the cost profile of occupying your workplace from constantly edging upwards, you should regularly "shop around" for the best deals from utilities, telecom and other suppliers.
The consumption of energy and its attendant cost is a substantial outgoing for many businesses so maybe you would want to give some consideration to incorporating an Energy Management Plan into your business environment to control costs and implement operational practice which delivers savings. The behavioural changes that you introduce will serve your company well, long into the future.
The Carbon Trust (carbontrust.co.uk) is a very good source of information in this area and they will also be able to help with where to get practical advice. All commercial landlords are subject to the government-directed programme of reducing carbon consumption so ask yours if they can help in this area as it will be of mutual benefit.
Try and plan for "churn" - (the occasional re-shuffling of desks/ departments to make better use of floorspace) as the business needs change. Getting contractors to move workstations and re-cable is expensive so try and aggregate a group of moves and do them in one go.
Consider what workplace practices and technological innovations may be of positive benefit to your business. This could include everything from home-working for selected personnel to relieve pressure on your workplace facilities to the advantages that ‘cloud computing ‘ can provide in terms of minimising onsite IT equipment.
Finally, although you are only renting your workplace, it is sensible to keep the space in good condition as it may reduce your reinstatement costs when you finally exit the property.