22 (117) 2015
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Real Estate & Construction

Renovate or relocate? 10 tips that will help you decide.

by Jarosław Pilch, associate director, head of tenant representation at Savills Office Agency
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It’s hard to define a good formula for a suitable working space that will please every company. Currently, average leases are signed for around five years. No later than one year before the lease agreement expires, a tenant should consider the future of their office space. 

It’s worth remembering that in case of extending the contract, an additional fit-out budget can be renegotiated.  Take this opportunity – or consider relocation to a more modern and newer building. Occupiers can count on fit-out incentives and free rent if they relocate to a new development.  In the current market, occupiers have more power to negotiate rates and incentives.

Consider these aspects before taking a decision:

  • Your company’s current situation and its plans for the next five to seven years. 

Analyse the current working style of your company and compare it with plans for the future. Do your office space and its location correspond with the values ​​proclaimed by your company and represent you proudly? Should the floor space be increase, decreased o simply changed? Perhaps you should decide to consolidate some functions of your firm to one location.

  • A suitable location

According to What Workers Want? published in 2013 by Savills and the British Council for Offices (BCO), 73% of employees aged 18-34 years rated location as the greatest influencer on employment decisions.  Ask yourself the following questions: Is the building located near transportation hubs? Are there any amenities available? Is the location optimal? Is it easily and quickly accessible for employees and your clients?

  • Age of the building

Depending on the age of a building’s fittings, facilities and equipment, the property will wear out differently over time. This depends on the quality of construction materials, where older fittings systems generating higher operating costs. Therefore, relocating to a new and more modern building, often with green certification and covered by the developer’s guarantee, is a more frequent choice. Usually such a decision leads to savings in operating costs and enhances the prestige of a tenant.

  • Availability of a parking space

How big is the car fleet owned by your company? How many employees drive to work? In the city centre with dense settlements, there are only underground car parks available as city councils attempt to reduce traffic by limiting the number of parking lots in new office developments. Consequently the price of a parking space is high as there are not enough parking facilities and the costs of building an underground parking is high. Generally, the further away from the centre, the cheaper parking space is, especially surface parking.

  • The condition and quality of common space

When considering lease extension in the current location, take into account conditions and the quality of common space, including air-conditioning, tidiness and state of toilets and quality of lifts. The reference point could be other buildings, especially new ones. In new office schemes, to increase the comfort of tenants, developers provide many facilities, including relaxation zones with Wi-Fi.

  • Property manager and technical support

A well-managed building operates more efficiently. Property managers working on behalf of the owner take responsibility for the efficient maintenance of equipment, in order to avoid problems and failures connected with their exploitation. The property manager is responsible for many important issues, including cleanliness. If it is possible, ask other tenants for their opinion on the property manager of the building you are considering.

  • Functional division of office space

Consider whether an area available in the building and its division meet the requirements of your organisation. Currently, we can observe a growing interest of workplace strategy services that analyse office space functionalities. Such an analysis will help you in designing the optimal office space, which could improve employees’ productivity, efficiency and satisfaction. 

  • Employees’ opinion

According to What Workers Want? employers should not ignore the expectations of their employees. Therefore, before taking a decision to change your office, find out what your employees think about it.

  • Office facilities

The report also highlights that respondents rated kitchen and good Wi-Fi connection among the most desirable office facilities. Wi-Fi connection allows employees to use tablets or laptops outside their workstation and kitchen serves as a networking and meeting place.

  • Design – coherent office fit-out

We all wish to work in a nice, well-equipped and comfortable office. An office fit-out should be connected with the organisational culture and values. Architects can certainly meet clients’ expectations to design a creative and inspiring office space that will not necessarily break the bank. Choosing the colours associated with the company brand, the purchase of new, comfortable furniture will certainly improve employees’ satisfaction and will raise the prestige of the employer.

Renovation and relocation are associated with high costs. It’s better to avoid hasty decisions and find an experienced advisor to represent your company’s interests and guide you through your options. 

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