Whether your business is making its first move to take its own commercial space for an office, shop, warehouse or other commercial use or whether it is relocating to new premises there are a number of important areas you need to consider.

Budget – leasing commercial premises can be expensive at the best of times but there are often other costs that need to be considered and budgeted for before you commit to a new lease. Some of those are:

    • Rent
    • Outgoings
    • Car parking fees
    • Repair and maintenance costs
    • Gas, electricity, telephones, internet and other services
    • Cleaning and rubbish removal
    • Costs of moving
    • Establishment costs
    • Legal costs
    • Make good
  • Positioning – In many instances the position of the premises is fundamental to the success of the business, particularly in retail leases. It can be worthwhile to budget for a higher rent for a better location;
  • Size – You need to consider the expected growth of your business when considering the best size of commercial property for you to lease. There are many commercial properties for lease and they become available fairly frequently so it is best not to take premises for a three or five year term that may be too small for your business in two years, as you cannot necessarily exit a lease early just because you have outgrown the premises;
  • Lease term – The costs of moving offices can be large and unless you are looking for a short term enterprise it is often best to try and lease commercial premises that will suit your business for a longer term, even if you do not wish to commit to a longer term. You will need to weigh up the additional incentives the landlord will give you in terms of rent free periods or contributions to your fitout of the premises for a longer term lease as against the ease of exiting the lease for a short term lease;
  • Buy verses lease – Another factor to consider is whether you wish to buy your commercial premises or rent them. We suggest that if the location is fundamental to your business and you will not need to grow the space then buying commercial premises that become available in the right location may be a good option for you, whether you buy the premises outside or inside of your superannuation. If that is not an issue at this stage then you could consider trying to have a first right to buy the property put in to the lease if the landlord wants to sell down the track.

Many people do not go to a lawyer in relation to their lease until the commercial terms have been negotiated and signed. That is certainly an option and Focus Legal will review the legal documentation you are provided with to make sure that the terms you believe have been agreed actually end up in the lease and your rights are properly protected. We will also try and minimise costs and risks to you through the term of the lease.

Sometimes a better way to proceed is to contact us when you are looking for premises so we can have a preliminary discussion and provide you with some pointers. We can then review the commercial terms and advise you of other things you could consider, which avoids the loss of bargaining position that can occur when you have already signed commercial terms.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.