HOA Signed – What Now?
You’ve just signed a Heads of Agreement (HOA) for a new office premises — what happens next?
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Leasing Process
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Size, Fit-Out, Budget
Size, Fit-Out, Budget
Review your current office as a starting point and decide what changes you would make in your new space.
Next, head to Caden’s Office Space Calculator to get an idea of how much space your business needs. Our Suites pages also have a Rent Calculator to estimate your rent based on your lease term — the rule of thumb is you pay a higher rate for flexibility, with longer leases being more cost-effective, but not as flexible.
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Search for Space
Search for Space
Caden’s Search Function (above) allows you to search at speed and easily find tenancies that suit your size and budget. If you are not sure how much space you need, jump into our Office Space Calculator!
*Tip – Widen your search parameters in both size and cost. It pays to challenge your thoughts and expectations by looking at spaces that might sit a little bit outside of your exact parameters.
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Inspect Properties
Inspect Properties
Armed with a list of office space options, it’s time to run some inspections. This is a critical (and fun) part of the search process.
Getting out and inspecting tenancies is the best way to get a true feel for size and value. There is often a stark difference between a space that may look good on a floorplan or in photos, to a space that works well in practise.
It is common to view a handful (5 – 10) of properties at once, before shortlisting your favourites and inspecting them for a second (and maybe a third) time.
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Negotiate Terms
Negotiate Terms
With your preferred office options decided, it’s time to ask for an Offer to Lease —prepared by the landlord, these are not legally binding and set a platform for terms to be negotiated, prior to engaging solicitors.
They will include the landlord’s standard terms for the building and the commercial terms (see Caden’s Glossary of Terms for help with this).
Once finalised, you will be expected to pay a deposit of one (1) month’s rent,
whereupon the landlord will instruct their solicitor to prepare the formal lease documentation. -
Sign Documents
Sign Documents
The final step is to execute all formal documentation.
Your solicitor will help review the lease documentation and your bank and insurer will know what is required to prepare the bank guarantee and Certificates of Insurance.
Size, Fit-Out, Budget
Review your current office as a starting point and decide what changes you would make in your new space.
Next, head to Caden’s Office Space Calculator to get an idea of how much space your business needs. Our Suites pages also have a Rent Calculator to estimate your rent based on your lease term — the rule of thumb is you pay a higher rate for flexibility, with longer leases being more cost-effective, but not as flexible.
Search for Space
Caden’s Search Function (above) allows you to search at speed and easily find tenancies that suit your size and budget. If you are not sure how much space you need, jump into our Office Space Calculator!
*Tip – Widen your search parameters in both size and cost. It pays to challenge your thoughts and expectations by looking at spaces that might sit a little bit outside of your exact parameters.
Inspect Properties
Armed with a list of office space options, it’s time to run some inspections. This is a critical (and fun) part of the search process.
Getting out and inspecting tenancies is the best way to get a true feel for size and value. There is often a stark difference between a space that may look good on a floorplan or in photos, to a space that works well in practise.
It is common to view a handful (5 – 10) of properties at once, before shortlisting your favourites and inspecting them for a second (and maybe a third) time.
Negotiate Terms
With your preferred office options decided, it’s time to ask for an Offer to Lease —prepared by the landlord, these are not legally binding and set a platform for terms to be negotiated, prior to engaging solicitors.
They will include the landlord’s standard terms for the building and the commercial terms (see Caden’s Glossary of Terms for help with this).
Once finalised, you will be expected to pay a deposit of one (1) month’s rent,
whereupon the landlord will instruct their solicitor to prepare the formal lease documentation.
Sign Documents
The final step is to execute all formal documentation.
Your solicitor will help review the lease documentation and your bank and insurer will know what is required to prepare the bank guarantee and Certificates of Insurance.
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Frequently Asked Questions
Starting your Search
If I don't need the space immediately should I delay my search?
Not necessarily. In the current market many Landlords would prefer to capture a Tenant (assuming the lease terms are acceptable) even if the commencement date is not immediate.
For example, it is not uncommon for a Landlord to lock in a lease and rent commencement date 4-6 months beyond when a Tenant is prepared to begin a lease. This timeframe could be longer if the space has been sat vacant for quite some time.
Larger space occupiers will find that prospective Landlords are prepared to commit to a lease further in advance than they would for smaller space occupiers. An experienced Leasing Agent will be able to advise you on this.
How much space do I need?
Every business has their own unique requirements, but many companies are now preferring to have their staff occupy largely open plan, collaborative working environments.
The majority of open plan office spaces are designed to accommodate staff at a ratio of approximately 1 person per 10m2 – 12m2 (of space). Tenants that have requirements for a greater number of offices (legal firms for example) will generally design their tenancies at a space per person ratio of more like 1 person per 15m2 – 18m2.
It is best to start by determining the number of people that you are looking to house. An experienced Leasing Agent will then be able to provide a size range for you to work with.
It is important for tenants to get out and have a look at some premises early in their search as it often helps to give context around the sizing of space.
If a Tenant has a strong preference to do a new fit out rather than find a tenancy with an existing fit out, it is then organised for a designer to do an indicative space plan to ensure the search is focused on tenancies of the right size.
Detailed Information
What is a ‘Heads of Agreement’ document?
A Heads of Agreement, properly drafted, is a non-binding document which sets out the key terms of a proposed agreement between parties.
A Heads of Agreement is provided to a Tenant prior to formally entering into a lease and Landlords will require a signed HOA before instructing their solicitors to prepare a lease.
Will a prospective landlord request information about my business?
Most Landlords will request ATO approved financial statements for the previous 2 – 3 financial years to understand the financial status of the company.
They may also run a company search to find out more information about the specific entity that the lease will be in such as:
• When the company was incorporated;
• Who the current Directors are;
• Whether there have been (or currently are) any insolvency procedures against those Directors; and, • A personal finance statement.
A prospective Landlord may also require other information (at their discretion) to satisfy themselves that the Lessee is of sound financial footing. A Landlord may also want to see a detailed business plan, particularly if the company is relatively young.
In summary, a Landlord is interested in your assets v liabilities so they can make a fair assessment as to whether the a company can meet the obligations of the lease.
What happens if the landlord is not satisfied with the information?
In this instance, the Landlord may request a meeting with the prospective Tenant to understand more about their business in order to make an informed decision as to whether to proceed with the lease.
If the Landlord is not totally satisfied that the Lessee can fulfil the obligations of the lease they may decide not to proceed.
Alternatively, the Landlord may decide to request that the Lessee provide a greater level of security (i.e an increased bank guarantee, personal guarantees or both).
Market knowledge gained from
decades of office leasing experience.
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