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The Suite Spot – Finding the right size for your commercial space

When you’re being charged at a $/sqm rate for office space, securing a space that is suitably sized is key in ensuring you’re not paying more than you need to. There are a number of factors that play into securing the right size tenancy. 

Below we have provided 2 floor plans of offices of 203sqm (left) and 130sqm (right) that have been delivered in Brisbane CBD buildings. These spaces cater for very similar requirements and would likely be be put forward to the same prospective tenant. Operating under the assumption (for sake of comparison) that these were leased under the same deal parameters ($675/sqm and a 15% incentive), the larger space would be leased for $42,000 more per annum which is more than a 50% increase on rent when compared to the smaller option. 

Achieving a strong density is paramount in ensuring you occupy an efficient space and aren’t overpaying in rent. 

To give you an accurate assessment on suitable sizing for your operation, we highly recommend you utilise our Office Space Calculator.

Further key considerations to finding The Suite Spot;

Growth Expectations

Managing growth, with respect to your ideal lease term, can be a fine line. This is something that the business will need to form an opinion around, however your leasing agent will be able to provide a recommendation and some assistance on this matter. No one likes paying for space that isn’t being utilised however, this is often a necessary evil in order to be able to cater for the company’s growth as they progress further into their lease. 

Work From Home/Hybrid Arrangement

Some, but not all, businesses are increasing their ability to have staff either ‘work from home’ entirely or under a hybrid arrangement. If you’re able to manage this closely, it can become an opportunity to reduce your sizing and number of desks as, on any given day, the desks available may suffice. Your leasing agent will be able to assist and advise on this with respect to your specific situation. 

Outgrowing Your Space Prior To Your Expiry?

A large consideration that must be made is the likelihood of outgrowing your space during your lease. One option that many businesses turn to is sub-letting their current space for the balance of the lease term and securing a larger premise. We have delved into this in another Insight piece – An Overview of Subleasing Office Space. 

Protecting Your Business Through Negotiations

There are a number of clauses that you may look to include to mitigate risk when taking on a new office tenancy, whether the concern be; taking too much space or outgrowing your space during the lease term. 

Break clauses can be a handy “out” for businesses that may have concerns about outgrowing their space mid lease term. It is important to note that many landlords are only concerned about the lease term certain (everything prior to the break clause date) as this is all they are guaranteed by the tenant. This may mean that the deal they are able to offer won’t be as strong as a direct lease without a break clause present. Break clauses are most often provided with a notice period in which they can be exercised. More often than not, there is a penalty for activating this clause because the landlord will want to account for the foregone rent and some expected downtime as the tenancy is taken back to the market. It is important to consider the effect of this break clause and how important it is that the business be able to break the lease at that time.

Taking each of the above points into consideration can be a very fine balancing act. We recommend reaching out to your leasing agent and putting together a plan regarding sizing and growth to ensure you are securing the most suitable space within the market. 

Not sure how much office space you need? Our calculator could help.