The following is a guide to the main aspects that should be considered when moving offices. It is not exhaustive and we would suggest that you discuss your precise requirements with either Guy Bowring or Philip Martin on 0207 222 5511.

Acquisition Surveyor

• A Chartered Surveyor or Commercial Agent can provide invaluable advice on the office relocation process.  It is a complicated and time consuming endeavour and one which is fraught with pitfalls.  A surveyor can source the best property, the best location and the best deal within a prescribed budget.  He will advise on the process and recommend other professionals who may be able to assist to secure the best result.  He will also advise on the appropriate level of Business Rates and service charge.  He will recommend which properties may be the best being considered for the criteria set down by the client.  He will negotiate upon the favoured buildings and assist in the process of securing the property and pushing it through the legal stage to the point of signing the lease.
 
• Fees tend to be based upon a percentage of the rent payable plus VAT as a one off charge and are usually success based.  However, incentive fees can be negotiated should they be required. He will advise on the various problems that can occur and will often pre-empt issues and may cause problems further down the line thus potentially saving money in legal fees and other costs.  A Chartered Surveyor or a Commercial Agent will endeavour to save a significant sum off the quoting terms of a rental property and secure additional incentives wherever possible.
 
Break Options

• A break option can reduce the liability of the tenant but will have an impact on the deal negotiated if it is "tenants only".  A "mutual" or "landlord only" break option or rolling break option can also be negotiated depending on the circumstances of both parties.  Further rent free can sometimes be negotiated as part of the deal dependant on whether the break option is activated.
 
Building Survey 

• It is important to instruct a surveyor to ensure that a freehold or long leasehold building is in good condition prior to purchase.  There can be significant expenses involved in repairing or refurbishing plant & machinery in poor condition.  These items need a specialist opinion to ensure that excessive liabilities are not taken on.  When taking leasehold accommodation, a Building Surveyor can advise on the quality of the mechanical and electrical plant and liabilities potentially avoided.  Floor loadings for particular issues e.g. Roller filing can be an important consideration at this stage to ensure the property is viable for the acquired use.
 
Business Rates 

• Business rates are a major, and increasing, liability for all companies in the UK.  Rates are re-assessed every 5 years but based on values from 2 years prior to the assessment date.  There can therefore be spikes and anomalies in the assessments when compared to current market conditions.  The Rateable Value, which is the rental level at that point, is reduced to a "rates payable" figure by the use of the Uniform Business Rate (UBR) which is assessed on an annual basis.  "Transitional relief" is also applied to smooth the increase in rates payable over the course of the following five years before re-assessment.  This can be a complex calculation and needs to be carefully checked to ensure that the appropriate rate is being paid on the correct floor area.  Business rates can be appealed, but can go up as well as down and therefore the actual value also needs to be ensured before being actioned.  Within London, a "Crossrail Levy" has now also been included in the rating assessment as a separate figure, this has been set at 2p in the £ for any rateable value above £55,000.  This is an additional cost, which will affect businesses at least the next 24 years and probably beyond.
 
 
Dilapidations 

• Dilapidations are the liability to repair at the end of the lease term.  This will be dictated by the lease terms and may be subject to a "Schedule of Condition" which should be attached to the lease.  The liability for dilapidations should be considered early in the negotiating process.  Even though the cost will actually only be incurred at the end of the lease it can be a significant sum and should be accounted for.
 
Empty Rates 

• Empty rates are payable on vacant properties after a period of three months.  During the first three months the rating level is nil but then it resumes to the full rates payable.  The only exceptions are that Listed Buildings are completely exempt from empty rates.  Charities get 80% relief from their rating liability and in some cases 100% relief at the local authority's discretion.  Appeals can be made according to whether the rate is deemed to be too high.  Also if there is disturbance, for example road works, demolition, or if the floor area is wrong, appeals can be made and assessed by negotiation with the District Valuer.
 
Furniture

• New modern furniture can transform an area at relatively nominal cost compared to dismantling and relocation of current desks as the market is very competitive.  Smaller desks are now possible due to flat screens being the norm and can help provide more efficient working space.  Cable management systems help to tidy away unsightly wires which can avoid IT problems and improve staff morale.  Eco friendly disposal of discarded desks is an important factor and can be inexpensive if carefully handled.  It can be an additional plus not only for the environment but also for staff morale.  "Lead in times" for furniture should be borne in mind as last minute decisions can be costly.
 
Incentives

• Rent free periods can be available as part of the negotiation for a leasehold office.  They are often generally seen as a way of easing the expensive transition between buildings, it is also a way to retain a higher rental level for the landlord.  In more difficult economic times it is also an incentive for the tenant to take the lease.
 
Lease Term

• A longer lease term tends to justify a better deal from landlords but may compromise flexibility.  A company has to decide how long it feels it is comfortable committing to in that particular office.  Sub-letting or assignment of surplus space can be a solution.  However ongoing liabilities cannot be avoided and both assignment and sub-letting can involve significant costs, double overheads and ongoing liabilities.  Short term deals can allow for flexibility but tend to be more expensive.  However, in some cases landlords require a rolling break option due to pending redevelopment and better than market deals can be obtained to compensate a tenant for this lack of security.
 
Legal Terms

• A solicitor should always be instructed to advise on any contract.  The main terms that will form part of the lease will include the lease term itself, repairing liabilities during the term, the dilapidations liability to repair the accommodation at the end of the term, payment of service charge, restrictions on the permitted use of the property, any break options, security of tenure (i.e. The right to remain in the accommodation legally at the end of the lease term).  As each property is, by its nature, unique, there will be liabilities particular to each lease.  These may include for example liability for the repair of air-conditioning units, uninsured risks or window maintenance.  The lease will also contain provisions for rent review if applicable.   There may be some assumptions made within this clause which can make a significant difference to the cost of accommodation at review and should be carefully considered prior to signing.
 
Location

• Location is arguably the most important aspect of a decision.  Deciding factors may include will be transport links, road network, staff amenity, local shops and restaurants, ease of access by staff, safety implications for staff coming to and from home and the impact on staff access.  All will be crucial issues when deciding on a move and its implications on morale and cost.

• The space itself has to fit criteria which have to be prioritised.  Some aspects are matters of opinion and quite subjective whilst others are crucial decisions which ensure that efficiency is maximised and long term costs and liabilities are not created.  Any final decision will be a compromise between location, cost, efficiency, function and image versus practicality.
 
 
Refurbishment

• Once a property is identified, space planning can be undertaken on the accommodation to ensure that it will conform to your requirements.  This will depend on a number of criteria including budget, open plan/cellular format, size of desks, number of staff, break-out areas, size of kitchen and reception areas.  The standard of specification required will also need to be assessed to ensure that an appropriate budget is arrived at.  This may include upgrading of cooling systems, moving the units, demolition of partitioning, cabling, relocation of floor boxes, renewal of perimeter trunking, decisions upon the level of audio visual equipment required and the standard of furniture or whether furniture from a previous office can be re-used.  Improvement in lighting levels can make a huge impact on the space and the staff.
 
• There are varying ways in which a refurbishment can be carried out.  "A design and Build process" gives an itemised list of everything specified at a fixed figure within a fixed time frame.  A tender process should be carried out to decide on the preferred contractor and if necessary cost consultants employed to ensure that he pricing levels are at an appropriate level.  There are some simple ways in which accommodation can be transformed at minimal cost, which can be so crucial in difficult economic times.  Re-carpeting and redecoration can transform a basic unit at limited expense.  Replacement of ironmongery can provide a different look to tired doors.  Upgrading a boardroom table and chairs whilst retaining office desks can give the front of house a very different feel whilst reducing the impact of costs.
 
Rent or Buy?

• In today's market, renting a single floor is often seen as the most efficient use of space rather than purchasing a single building which would split members of staff between different floors.  A purchase can provide a good long term investment perhaps with the benefit of future conversion to other uses especially residential.   Commercial decisions are often best made looking purely at the occupational benefits.  A lease can allow as much flexibility as required for the company to expand and contract via break clauses and lease expiries.  Rent reviews can be volatile, but the impact can be lessened by negotiating in break clauses where necessary.
 
Service Charge 

• Service charges can include the following costs: Audit fees; cleaning of common parts; staff; landscaping; wc facilities; maintenance and cleaning, cooling plant maintenance; rubbish removal; security signage; management fee,; and health & safety.  Insurance can be included but is often dealt with by a separate charge.  The service charge budget is assessed usually by relating it to expenditure during the previous year.  Major works can occur from time to time and a comprehensive survey of the accommodation can alert the incoming tenant to what issues may be arising.  Service charges tend to be payable in advance on the quarter days and is calculated on a pro-rata basis according to the sq ft occupied.  Any monies in excess of the annual budget should be credited at the end of the year. In softer market conditions service charges can be, on occasion, capped.  Where there are potential future liabilities, sinking funds are also occasionally put in place by landlords to smooth the costs and lessen the impact of sudden larger scale works when required.  Whilst this can reduce impact on tenants, some can object if they are unlikely to see the benefit during their lease term.
 
Service Charges 

• In a multi let building there will be "common parts" these are the areas that are used by the tenants to access their accommodation.  These areas are administered by a Managing Agent who will control the building and recharge costs to the tenant.
 
Size 

• The accommodation necessary to house any company will vary according to the nature of that organisation.  Working practices vary widely between different companies and the size of the space required will depend on how much open plan space is required compared to "cellular" accommodation, including offices and meeting rooms.  A reception area may also be required as well as kitchens and "break out" areas.

• A general rule of thumb for the amount of office space required is approximately 100 sq ft per person to include all ancillary accommodation.  However, this can vary considerably when you compare, for example, a trading floor to an executive suite of offices.  The difference between the "gross internal area" which includes stairwells, kitchens, lobbies and corridors can be very distinct from the "net internal area" which is purely the usable office accommodation and a precise measurement should be taken.  Contemporary offices with flat screens tend to now require smaller desks allowing more efficient use of the accommodation without compromising style or comfort.  Space requirements should be analysed and decisions made about how close certain departments need to be to each other for ease of communication.  The number of WC's required by the number of staff should also be assessed.  Disabled access is also crucial for some organisations.  A good "eco rating" can also benefit green credentials.   Energy efficiency can be checked by asking for the EPC (Energy Performance Certificate) now mandatory for all office leases.  A BREAM rated building can also score points for the environmentally aware.

• A space audit should be carried out which would include an assessment of the office accommodation as well as filing space required.  Decisions need to be made about how much filing should be moved off site.  Should space be available on site for a cheaper basement area, this can also be an efficient way of saving costs on expensive office space.  Whilst cellular offices have historically been the norm, "pods" of desks of 4-8 people now tend to be the usual and is seen as an efficient and enjoyable method of working.
 
Stamp Duty Land Tax

• Stamp Duty Land Tax is currently based upon 1% of the total rent over the period of the term including VAT discounted by 3½% per annum to arrive at a net present value.  This element of cost should be included in the calculations of inclusive costs for the move.
 
Style

• Important considerations include whether to decide upon a period or a modern building.  A period building may have a certain style but is often split up into impractical cellular rooms rather than a single open plan area.  Also, cabling can be very difficult, in some cases, impractical and in others almost impossible.

• The appeal of an upper floor with good views and lots of good natural light can seem tempting, but a lower floor has ease of access if the lift is out of order and can provide better ceiling heights in period buildings.  Whether a building is listed with affect how much can be done to the space.  Modern buildings can provide a blank canvas to work on.
 
Voluntary Code of Leasing Practice

• Many of the large landlords in the UK now conform to the Voluntary Code of Leasing Practice.  This is still only a voluntary code however and terms vary between different transactions according to the usual criteria e.g. Covenant strength, lease term etc.  However, it is a good working practice as a starting point and can be advantageous when considering alternative landlords.

For further details on any aspect of the above and to discuss how we can assist your move, please call us on 0207 222 5511.