Renting Office Space? Here’s How to Stay in Control of Your Costs

Leasing office space can seem cost-effective, particularly when compared to serviced offices or co-working spaces, but the attractive monthly rates per square foot are often just the beginning of the costs.

The actual expense of office leasing encompasses a lengthy list of ongoing and one-time costs, fees, and charges. Your lease may be the most significant element, but you will discover you are settling related bills before you enter your office, and even after you have vacated it. Forecasting these costs can help you budget effectively and may also reveal that other options offer superior value for money.

Upfront costs

Be prepared for some legal expenses before you even inhabit an office. You might assume that office leasing is straightforward, but many have made that error and suffered the consequences, either due to disagreements or simply because they were not informed of extra charges.

Like any legal contract, it is advisable to obtain professional counsel first. Then you can be certain that the lease terms you are executing are what you anticipate.

Outfitting your office

Most leased offices are unfurnished. That offers you flexibility, but also elevates your costs.

Furnishings

At a minimum, you are likely to require desks and chairs for your workspace. But most offices demand additional items. You may also need furniture for reception areas, conference rooms, employee break areas, and other facilities.

IT and equipment

You will need to purchase the equipment you will use, such as computers and servers. You may also need to cover the costs of installation and fit-out, including cabling and networking, as well as potentially additional measures such as extra security and ongoing IT maintenance.

Decor

Leasing units will typically be decorated neutrally, but few companies want an entirely neutral office environment. Whether it is branding, displays, or just artwork to generate visual appeal, you will need to invest extra money to make it feel like your office.

Service fees

You are likely to incur a service fee to cover the costs that are shared among all the building tenants. These fees may include: cleaning and upkeep of shared areas, such as external doors or common corridors; personnel and operational costs of a shared reception; and an element to cover the long-term upkeep of the building, even if that upkeep does not occur while you inhabit the space.

Although you obtain these benefits at a fraction of their cost, the fees can rapidly accumulate, particularly if they encompass expensive items, such as multiple personnel or amenities like elevators.

Other ongoing costs

Your lease, typically calculated on the area you inhabit, will only be one of the bills that you have to pay.

Insurance

Just like your residence, you will require sufficient insurance for your office contents. The distinction is that, unlike your home, you do not have total control over your premises and their security. That can mean your business insurance premium is elevated to reflect the increased risk.

Utility expenses

Bills like water and electricity are typically your responsibility. It is always prudent to verify what metered connections you possess and precisely what is on them. Items like air conditioning systems, for instance, can be expensive to operate.

Taxes and rates

Taxes are a reality of business, and business rates can be a significant financial burden. Depending on the property’s assessment, business rates can be substantial. And if you are in a Business Improvement District, you will face an additional levy on those rates to fund initiatives that promote the broader area.

Lease-specific costs

A leased office cannot, typically, be modified. Minor alterations, such as hanging artwork or installing a bulletin board, do not require approval. However, more significant alterations, such as repartitioning areas or cutting into walls to install power or networking outlets, may require landlord consent and incur additional fees.

These fees, which can range from a nominal application fee to covering the legal costs of a lease modification, will apply even if your alterations enhance the value of the landlord’s property.

General upkeep

You will be liable for the state of your office space. Every building will experience wear and deterioration, which is to be expected. However, you will likely be responsible for handling repairs to any areas under your control, such as fixtures and fittings.

For extended leases, you may also be required to redecorate regularly to maintain standards. This might even encompass external areas that form part of your space, such as a small courtyard, parking areas, and even external walls and windows.

End-of-lease costs

Even vacating your office can be expensive. A lease will typically include a clause that requires you to leave the space in the same condition as you found it. This may mean you have to remove any modifications you made – even if you paid fees to execute them – and restore the overall condition to an acceptable standard. Failure to do so may result in a lease violation, allowing the landlord to pursue legal action to enforce the terms.

The situation can be even worse if you want to terminate your lease prematurely. Leases tend to be for fixed durations, and if you are not at a break clause, you might find yourself liable for termination fees. Indeed, sometimes the penalties may be greater than the cost of maintaining a vacant office until you can terminate the lease. If you are an expanding company or one that might relocate, more flexible alternatives may be superior.

The Wrest Park Business Centre advantage

Co-working and serviced office spaces are a popular choice because of the transparency and adaptability they offer. Rather than leasing and then accumulating all the extras, serviced spaces charge a single rate. With predictable costs and no surprises, they are all-inclusive: you receive a decorated, furnished office with IT infrastructure in place. Available on flexible terms, your offices can easily grow and adapt with your business. You might find that it is the most cost-effective way to obtain the office space you require.

What to consider

Explore our facilities at Wrest Park Business Centre to discover how they can work for your business. Located at Capability House, Building 31, Wrest Park, Silsoe, Bedfordshire, MK45 4HR, we are ideally positioned to serve Bedford, Luton, Milton Keynes, and surrounding areas. To learn more and see some of the outstanding offices we have, along with the advantages they offer, please contact us at info@wrestpark.co.uk or call 01525 306000.