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Colliers International Tenant Leasing Guide

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Allow us to introduce ourselves

Getting started

Top 10 tenant mistakes

The Offi ce Leasing process

Step 1 - Determine your property needs

Step 2 - Evaluate market alternatives

Step 3 - Commit to premises

Step 4 - Fitout design and project management

Translating the lingo - Glossary of terms and FAQ’s

Relocation checklist

Contents

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Allow us to introduce ourselvesThe who, what and why of Colliers International.

The Offi ce Leasing Guide

This step-by step guide has been assembled to refl ect Colliers International’s knowledge of the leasing process and its pitfalls. Complete with information on fi tout and “make good” costs, timelines and frequently asked questions, it is an essential handbook to ensure your decision to “stay or go” runs smoothly.

Who is Colliers International Offi ce Leasing?

We are an award-winning team of offi ce leasing professionals with intimate knowledge of the local and national leasing markets, occupier needs and the leasing process.

At the forefront of our service is a commitment to delivering a business accommodation solution to meet your organisation’s needs - now and in the future. We appreciate that your premises is more than just an address; it is a platform with which to make your business objectives a reality.

Colliers International’s culture of knowledge-sharing gives you access to the suite of skills required to make an informed leasing decision, including experts in workplace design project services, tenant representation technology, retail, industrial and sales.

Why engage our services?

Working with the Colliers International Offi ce Leasing team will save you the time and confusion of dealing with multiple agents, landlords and consultants. We can streamline the process for you to allow you to focus on your core business.

In contrast to the residential leasing process, offi ce leasing practices allow you to work with one leasing professional to seek out all suitable options in the market. Our national database contains information on every offi ce listing, agent and landlord so that we can exhaust the market to fi nd the right option for your business, regardless of who the leasing agents are. Alternatively, if you prefer to use the services of a Tenant Representative, our Offi ce Leasing Team is also able to refer you to specialists in this area.

We look forward to being of service to you.

Simon HuntManaging Director - Offi ce Leasing

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Getting StartedMaking an educated decision about your offi ce accommodation.

When considering new offi ce premises, it is critical to address the following questions:

What are my options?

Stay put If your present space satisfi es your accommodation needs, but you are approaching the end of your lease, you may consider staying where you currently are. You will need to ensure the space is available for you to extend your lease, and then negotiate a new lease with the building owner.

Relocate The expiry of your lease could off er you an exciting opportunity to transform your business and create new effi ciencies by relocating to new premises.

Why should I relocate?

Business needs If your current space is too small, too large or infl exible relative to the way your organisation works, then new or re-engineered premises can act as a springboard for improved productivity and operational cost savings. Additionally, market conditions may create cost benefi ts supporting the business case for relocation.

Brand value enhancement The building which you occupy and the fi tout in your tenancy speaks volumes about your organisation. A revitalised fi tout or new premises can strengthen your employees’ sense of brand as well as communicate your core values to customers and other stakeholders.

Employee satisfaction and retention Entrepreneurial businesses will consider the many positive fl ow-on benefi ts companies achieve in repositioning their business and their people into better accommodation. Increases in staff morale lead to increases in staff productivity. Increases in staff productivity lead to increases in the bottom line fi nancial performance of any business.

How much will it cost?

Operational costs Negotiability of rental and incentives is dependent on the equilibrium in your local marketplace. In certain markets, the development cycle has created favourable circumstances for tenants considering relocation. To understand conditions in your offi ce market, contact your Colliers International professional for the outlook in your location.

Fitout and make good costs Your entry and exit strategy to a lease can greatly aff ect the real cost of your commitment. Workplace design and fi tout costs should be viewed as an organisational opportunity. A well planned and executed fi tout will adapt to your organisation’s growth and changing needs and minimise churn costs. A balance between your fi tout costs and the benefi t it yields to your organisation is therefore critical. In addition, make good commitments will aff ect your cash fl ow when exiting a lease. These costs are covered in more detail in this Tenant Leasing Guide.

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When should I start?

Plan, plan, plan Whether you decide to stay or go, knowledge is key. Allow suffi cient time to ascertain your current situation, review other options, assess the marketplace context and possibly negotiate with your current landlord to ensure you optimise the end result.

Timing The period required to conduct this process ranges from three to six months as a minimum and up to two years or more for larger organisations.

Who should I involve?

Your internal steering committee should be chaired by a senior employee, supported by decision-makers and infl uencers including human resources, IT, divisional heads and staff .

You may wish to conduct a survey of your staff to determine their needs, preferred work style and location.

Professional real estate advice is a critical part of the project team skill set. This will arm you with insight into the marketplace and your alternative options. By providing knowledge of productivity - enhancing offi ce fi touts, a skilled workplace strategist and design professional will complete the team.

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Starting the renewal or new premises lease negotiations too late.

Not having a clearly defi ned real estate brief.

Focusing too heavily on pure fi nancial costs.

Failure to appoint an internal single point of contact/project leader.

Making incorrect/inaccurate estimations of their space requirement.

Failing to leave enough time at the end of their lease to fulfi l “make good” obligations.

Acting too slowly once a decision is made on premises, consequently missing out on opportunities.

Agree to terms prior to obtaining a space planning perspective (e.g. conducting a “test-fi t”).

Failing to allow for growth space.

Not appreciating that the best deals are often secured well in advance of the space actuallybecoming available.

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Top 10 Most common mistakes made by commercial tenants.

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The offi ce leasing process4 steps to business productivity.

Conduct accommodation requirement evaluation.

Produce real estate brief.

Design consultation and test-� ts

Financial comparison of

proposals

Confi rm development sites/existing building options and

assess via inspections.

Relocate

Reconfi rm accommodation requirement evaluation.

Brief preferred lessors.

Begin off er/counter off er process.

Short-list options, design consultant to evaluate

space effi ciency.

Stay Put

Determine your property needs.Understand business needs.

Identify decision makers and confi rm critical time path.

Step 1.

Step 2.

Step 3.

Step 4.

Evaluate market alternatives.Relocate or stay put.

Consider existing premises as possible opportunity.

Brief existing lessor.

Reconfi rm accommodation requirement evaluation.

Design consultant to re-evaluate space effi ciency.

Begin off er/counter-off er.

Committing to premises.Relocate or stay put.

Commit to new (or existing) premises.

Complete new (or variation of) lease documentation.

Fitout design and project management.

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Step 1Determine your property needs.

Taking your requirement from notion, to motion

Skipping the planning stage triggers a number of the Top 10 mistakes most commonly made by offi ce tenants. It is crucial to understand what your business and workplace, and therefore, property requirements are through a process of evaluation and forecasting. To help you with this, Colliers International off ers a project advisory service that can plan your project from start to fi nish.

Organisational briefi ng - confi rm your business plan objectives

Commercial Leasing decisions should be considered with a medium to long term mindset with most leases running for three years or more. Your property decisions should take into account your company’s future requirements as well as today’s needs. Guided by a professional, workplace strategist/designer, the organisational briefi ng process will develop answers to a range of questions including;

• Is your business growing or shrinking?• What are your brand values?• What are your preferred work settings?• What type of employees will you have in the future?• What will your technology requirements be in three years?• Are you considering acquiring or merging with other fi rms?• What eff ect will moving have on your customers and staff ?

Only by adopting this “concept-planning” phase will you achieve the maximum benefi t (both fi nancial and strategic) in a relocation or re-engineering of your business accommodation. Only minimal gains are possible if the workplace design focus is restricted purely to the design and construction phase (Step 4).

Involve key internal decision makers

Assemble a team with a breadth of skills to drive the project. Consider involving your experts in IT, HR and Finance. They will be familiar with specifi c future trends that may infl uence your requirements and decisions. Their involvement from the outset will help clarify and focus your brief and achieve internal buy-in.

Be sure to appoint a project leader to liaise with your internal stakeholders as well as your broker and consultants.

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Step 1Determine your property needs cont.

The workplace brief

The organisational briefi ng process will result in the documentation of your workplace requirements.

• Growth projects• Space budget• Space standards• Organisational vision and objectives• Cost parameters

The real estate brief

A well-prepared real estate brief will synthesise the workplace brief and translate this to your property requirements. The brief will expedite your decision-making process - you will save considerable time by only inspecting and reviewing suitable properties and you will also have a framework with which to assess and compare your options. An important element in developing this brief is to audit your existing premises - your real estate brief will document your desired outcome.

What should be in your brief?

Your real estate brief should consider a wide range of criteria:• Size of space • Fitout needs• Number of employees (max and min) • Image/quality/aesthetics• Location • Car parking• Building services • Offi ce hours• Security and access • Lease structure preferences• Technical requirements • Timing• IT and communications infrastructure • Budget• Environmental considerations/NABERS • Other unique needs• Signage/naming rights • Term/renewals

Your brief should be documented and used to evaluate options. Consider ranking each factor in terms of importance as you may have to compromise on some items, depending on the options available.

Know your local market and commitments

During this phase, you should familiarise yourself with local offi ce market conditions and existing lease commitments. By knowing the market vacancy rates, supply projections and indicative rentals, you will be in a better position to evaluate various proposals. Your Colliers International Offi ce Leasing professional can provide you with an offi ce market presentation which details these factors.

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Step 2Evaluate market alternatives.

Inspect and evaluate your options. Real estate evaluation.

Release your brief to the market

To avoid having to deal with multiple agents, you can request your Colliers International professional to approach the market on your behalf. With an intimate knowledge of the market, together with a well established network of agents and owners, Colliers International will act as a single point of contact whilst still sourcing all space opportunities.

Inspect and evaluate alternative premises, your current premises and prepare a shortlist

When analysing alternative premises, consider timing , fi nancial and other incentives which may be on off er. Your stay-put option should include expansion/contraction costs as well as potentially reconfi guring or completely refurbishing your workspace. Aim for a shortlist of three to four properties.

Evaluate options against your brief, ensuring property options match your stated business objectives. Colliers International has developed a range of decision models and matrixes to assist in decision making, enabling short listing of a wide range of options. These tools dramatically improve effi ciency in the evaluation process.

Financial analysis

There are several ways to compare leasing fi nancials including:• Gross eff ective rent per square metre • Gross face rent per square metre• Gross and net rent per square metre • Total occupancy cost per employee• Net face rent per square metre • Net eff ective rent per square metre

Further detail on these measurements is provided in Frequently Asked Questions.

Look beyond the square metre rate on off er. Some offi ce space is highly effi cient, enabling you to seamlessly accommodate your employee quota in less space. For example, you may require 500m² to accommodate your staff in one building whilst another may be able to house them comfortably in only 400m². In this instance it does not make sense to compare the two options based on their rate per square metre but to use a lease analysis model (refer to the next page for more information about Colliers International lease analysis models).

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Step 2Evaluate market alternatives cont.

Market Incentives

Lease conditions, in particular the off ering of market incentives can also have an impact on the feasibility of a particular option. Incentives are commonly off ered in the following forms;• Capital contributions towards your offi ce fi tout • Rent free periods • A combination of the aboveIncentives will depend on the market conditions at the time of your negotiation and your Colliers International agent can work with you to understand the state of play within your market.

Compare your options using a lease analysis model

Colliers International has developed a lease analysis model (LAM) designed to compare leasing options on a fi nancial basis, using an “apples to apples” approach. The model allows the comparison of lease proposals from multiple lessors, demonstrating the cost of the fi nancial off er (taking into consideration incentives, rent and term) over the life of the lease.

Workplace design and fi tout considerations

It’s not all about cost

When evaluating your property options, don’t forget to consider the non-fi nancial costs and benefi ts for each property option. Your Colliers International workplace designer can help you evaluate each option’s impact on factors such as staff productivity and communication, corporate identity, IT and communications performance and your customer base. If appropriately engaged at Step 1, Colliers International will maximise your ability to positively infl uence the workplace brief.

In today’s challenging business environment, it is critical that organisations extend beyond the traditional view of offi ce accommodation and the measurement standards normally applied. It is now a fundamental requirement that the offi ce architecture supports the intellectual work demanded by employees and facilitates an organisations continuous improvement strategies. It must also contribute towards the development of team networks and organisational learning systems. In addition, the offi ce systems must support organisational change effi ciently, eff ectively and with minimal redundancy.

Test-fi t the options - determine workspace effi ciencies

By conducting a design “test-fi t” or site audit of the short-listed options, your workplace designer will determine the workspace ratio effi ciencies for each property. This process also produces sample fi tout designs prior to you agreeing to terms.

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This process helps determine your fi tout costs and will also enable you to compare your premises options on fi nancial (e.g. fi tout costs) and non-fi nancial (e.g. optimisation of the workplace brief) criteria more eff ectively.

Your workplace designer will provide the following services during this critical evaluation phase:• Prepare a detailed existing site/space/fi tout audit• Assess items suitable for re-use in the new fi tout• Manage the pre-design process including a review of local authority approvals and code requirements• Prepare selected site audits• Prepare ‘stacking and blocking’ plan• Prepare preliminary concept designs• Conduct building services audits• Provide an opinion of likely fi tout cost

Fitout costs

Attaining a fi tout that is aligned with your organisation’s envisaged outcome will depend on what components are viewed as necessary, as well as what is discarded during the design phase. It is critical that all aspects to be included in the fi tout are assessed to determine their contribution to the overall objectives.

Step 2Evaluate market alternatives cont.

Equally important is the identification and evaluation of those components overlooked. The identification of positive and negative components through the audit process provides the opportunity to maximise the effectiveness of the final fitout and potentially minimise its cost. As fitout costs can vary depending on location (CBD or Metropolitan), and the level of fitout required (i.e. Premium, Standard or Functional) it is best to contact Colliers International for a tailored estimate.

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Step 3Commit to premises.

Completing or varying your lease documentation, commencing the full design process.Real estate issues.

Heads of agreement

Once the particulars of a leasing agreement have been negotiated, both parties will sign a “heads of agreement”. This document is generally not legally binding but is a gesture of “good faith” that terms have been agreed. When signed, this document will be used to brief solicitors so that a Deed of Lease can be prepared.

Workplace design issues

When a leasing agreement is contemplated, the workplace fi tout process needs to be activated immediately. At this stage you should have completed:• Needs analysis• Space budgets• Test-fi t

This will enable you to align your workplace design with your business needs and with accurate information regarding your organisation’s requirements. The sooner a designer and project adviser is engaged, the better the outcome will be. It is vital that this stage is viewed as an investment in the organisation’s future and not merely a new fi tout. The fi tout should be linked in with the organisational strategy.

Leasing Documents

During a typical lease negotiation, heads of agreement documents are used as a medium to determine terms and conditions acceptable to both the lessor and the lessee. Once the fi nal position of both parties has been outlined, the lease documentation is then drafted by the lessor’s legal representative and presented to the lessee in the draft form for review. When both parties have agreed on the documentation, the lease is executed and accompanied by a bank guarantee and relevant insurances (payable by the lessee). This forms the binding legal agreement between two parties.

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Step 4Fitout design and project management.

The fi nal stage of the process provides the perfect opportunity to re-think offi ce imperatives and prepare a brief for the envisaged space that will promote organisational eff ectiveness, community, communication and productivity. The sooner you engage a capable designer and project manager to evaluate your needs, the more time you will have to create the space that will match your organisation’s vision.

Colliers International can manage the process from start to fi nish, including the following sequence of tasks:

Design development/authorities approval• Engagement and full briefi ng of all other specialist engineering consultants• Commencement of detailed design• Development of fi nishes and selection• Short-list of furniture selection• Review of opinion of likely fi tout cost• Detailed programme preparation• Council/authorities liaison

Detailed design and documentation phase• Preparation of documentation for tender• Finalise furniture selection• Stakeholder coordination• Obtain building/resource consents

Tender review phase• Determine agreed tender panel• Tender management and analysis• Review and assess tender responses• Submit recommendation for client approval

Contract administration/fi tout phase• Manage the delivery process and administer contracts• Appoint all approved contractors and suppliers including head fi tout contractor• Cost and variation management• Project manage delivery programme

Project completion/defects rectifi cation/occupation phase• Oversee practical completion• Timely issue of the Code of Compliance• Inspection and sign-off • Manage the identifi cation and completion of all outstanding and defective works• Cost reporting and fi nal accounts

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ABGR (Australian Building Greenhouse Rating)

AssignmentThe transfer of the right, title and interest in property of one person (the assignor) to another (the assignee).

Base DateA reference date for determining increases in outgoings.

Cap and CollarA term and method used in some market review clauses. It is a mechanism that puts a nominated ‘cap’ or maximum amount by which the rent can be increased, or a ‘collar’, the maximum the rent can decrease, on the nominated market review date. As the commercial offi ce leasing markets strengthen, these review methods become increasingly uncommon.

Approval from the relevant authorities for carrying out building work on the premises, usually for fi tout.

Development ApprovalApproval from the local council with regard to zoning or changes in the permitted use of the premises.

Green StarGreen Star by the Green Building Council of Australia (GBCA) is a suite of tools which are predictive – rating the building or tenancy’s capability to perform and not how it actually performs. They incorporate all environmental aspects from energy, water and waste to indoor environmental quality and material impacts.See www.gbcaus.org

Green Star Tools for Offi ce Include:Offi ce Design:For the design of a new building. Excellent for leasing new developments and the most commonly used version to date.Offi ce As Built:For what is actually built. Addresses the fact that often the constructed and commissioned building or fi tout diff ers to what was designed. Rapidly increasing use.Offi ce Existing:For buildings that have existed for over a year.Offi ce Fitouts:For tenant’s fi touts.

Gross Lettable Area (GLA)GLA is the fl oor space contained within each tenancy at each fl oor level by measuring from the dominant portion of the walls outside faces, to the centreline of internal common area/inter-tenancy walls.

Gross Eff ective RentThe rent payable under the lease net including all incentives and building outgoings.

Gross Face RentThe rent payable under the lease excluding any incentives but including all building outgoings.

Translating the lingoGlossary of terms and FAQ’s.

It is administered by a Government Department and rates the actual performance of a building and/or tenancies on a 6 star rating scale. It is part of NABERS system (The National Australian Built Environment Rating System) see www.abgr.com.au

Construction Certifi cate (Formerly known as Building Approval)

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GBCA (Green Building Council of Australia)An industry body facilitating the transformation of the property market with regards to ‘Green’ buildings and the National Administrator of the Green Star suite of rating tools. See www.gbcaus.org

Gross RentGROSS RENT = The rent payable inclusive of building outgoingsGROSS RENT = Net Rental + OutgoingsMost leases are based on gross rents plus your proportionate share of any increases in the building outgoings over and above a predetermined base date.

IncentiveAn inducement off ered by the Lessor to attract new tenants to the building. Can be off ered in a variety of ways (e.g. rent free, provision of fi tout etc).

LessorThat party, governing the formal lease documentation at a particular property, typically the owner or owner’s representative.

LesseeThat party, whose name appears on the formal lease document, binding themselves to the terms and conditions stated therein. Otherwise known as the tenant.

Lettable area/Net Lettable Area (NLA)NLA (measured in square metres) is the fl oor space between the internal fi nished surfaces of permanent internal walls and the internal fi nished surfaces of dominant portions of the permanent outer building walls. It generally includes window frames and structural columns and excludes

toilets, cupboards, plant/motor rooms and tearooms where they are provided as standard facilities in the building. It also excludes areas dedicated as public spaces or thoroughfares such as foyers, atriums and building service areas.

Make GoodThe Lessee’s obligation to reinstate the tenancy prior to expiry of the lease.

NABERS (National Australian Building Environmental Rating Scheme)Is a multiple index performance–based rating tool that measures an existing building’s overall environmental performance during operation. The energy component of NABERS is the ABGR rating. The brand also includes NABERS Water, NABERS Waste and NABERS Indoor Environmental Quality, see www.nabers.com.au. National Administrator of NABERS is from the Department of Environment and Climate Change (DECC).

Net Eff ective RentThe rent payable, after market incentives, excluding outgoings.

Net Face RentThe rent payable prior to the inclusion of any incentives (e.g. rent free period).

OptionThe Lessee’s right to renew a lease for an agreed period of time prior to expiry of the initial lease.

Translating the lingoGlossary of terms and FAQ’s cont.

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Translating the lingoGlossary of terms and FAQ’s cont.

OutgoingsStatutory costs associated with operation, upkeep and/or maintenance of the building (e.g. air conditioning, lift maintenance, common area cleaning, security and electricity). It also includes costs such as municipal rates, water and sewerage rates and usage charges, car park levies and land tax.

The following are just a few of the more commonly asked questions about leasing o� ce space.

How can I negotiate the best deal?By carefully selecting the right properties on your shortlist you can create a competitive environment whereby the best rent can be achieved. Your Colliers International consultant can assist throughout this process.

A square metre is an area of measurement, one metre by one metre. It is approximately equivalent to 10.764 square feet and is the standard unit of measurement for offi ce space in Australia.

How much space will I need?

Are amenities included in the Net Lettable Area?No, as the amenities are incorporated within the common (core) area of a building and comprise toilets and tearooms. This excludes amenities constructed as part of the lessee’s fi t out.

How can I be sure that all properties listed will be shown as an option?1. You will be in the driver’s seat throughout the entire process. Your Colliers International consultant will simply present all suitable options to you and save you the time and inconvenience of inspecting unsuitable options and dealing with multiple agents, architects and consultants. You will still create the shortlist and make the decisions.

* Source: Colliers International Project Services

What is a square metre?The mechanism whereby the rent upon review cannot decrease.

The mechanism under the provisions of the lease allowing the lessee to find a suitable replacement tenant. This is subject to lessor approval and unless specifically stated, does not limit your legal responsibilities during the term of the lease.

A common ratio used to measure the tenant efficiency of individual building’s floorplates. This ratio is calculated by dividing the total net lettable area divided by the number of people who occupy a floor. Average Work Space Ratios vary between 1:10 and 1:20 square metres.

Ratchet Clause

Rent Review The method by which your rent can vary during the term of the lease. Can be either a market review, a predetermined figure or fixed to an index such as the CPI. The review structure for the duration of the lease period is agreed prior to lease commencement.

Sublease

Work Space Ratios

The amount of space required will vary depending of the nature of your business and the ‘efficiency’ of the space you end up selecting. As a rule of thumb you will require roughly between 10m² and 20m²* of space per employee.

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2. If you choose to work with a Colliers International Leasing Representative as your preferred agent, you will ensure they receive a fee from the building owner (regardless of who the owner or leasing agent is). By working with us as your preferred agent you are empowering us to source all property options with ALL owners and agents in the market to fi nd the most suitable accommodation for your business.

What cost elements will my outgoings consist of?Outgoings means the total of all costs, charges, rates, taxes, fees, expenses and other outgoings incurred by the landlord or for which the landlord may be liable in respect to the whole part of the building. These include rates, taxes and operating expenses such as insurance, common area cleaning etc.

What are the diff erences between gross rent and net rent, face rent and eff ective rent?GROSS RENT is the rent calculated inclusive of all building outgoing costs. The tenant usually pays the increases in outgoings. NET RENT is the rent calculated exclusive of building outgoing costs. Under a net lease outgoings are still payable but paid by the tenant separately to the net rent.

FACE RENT the rent calculated before taking into account incentives or increases. This rent is stated in the lease.

EFFECTIVE RENT is the rent calculated across the full term of the lease after taking into account the eff ect of an incentive.

EFFCTIVE RENT = FACE RENT – INCENTIVES GROSS RENT = NET RENT + OUTGOINGS

Will I be able to sublease or assign my lease?Most commercial leases allow the Lessee to sublease or assign their premises. Typically, the Lessor is unable to unreasonably withhold consent to the sublease/assignment. A prudent Lessor however will consider the strength of covenant being off ered by the incoming tenant and will be reluctant to accept a sublease/assignment where their fi nancial position and/or security will be reduced as a result of the sublease/assignment.

What additional costs am I responsible for over and above the base year?The Lessee will be responsible for a proportion of any increases in the total operating expenses relative to the year or the part thereof.

The proportion will be calculated in accordance with the Lessee’s percentage contribution as specifi ed in the lease. Operating expenses will be defi ned in the lease and will vary from building to building. The base year is the nominated year stated in the lease. This may be updated subject to the rental review clause in the lease.

What are the rent review patterns for the term as well as the option period?Most Lessors will have a standardised lease proposal for their building, including a rent review pattern pre-agreed in light of the Lessor’s own objectives and current market conditions.Typically, the two most signifi cant infl uencing factors on rent review patterns are lease term and the commencing rental. Rent review methods may include fi xed increases, structured increases or reviews to market levels (with or without a ratchet clause). A ratchet clause ensures that the reviewed rental can be no less than the previous year’s rental, CPI plus a fi xed percentage, and often comprise a combination of these throughout the term of a lease.

Translating the lingoGlossary of terms and FAQ’s cont.

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Lessees will typically request an option period as part of the lease negotiation, allowing them to extend their occupation beyond the initial lease term. It is advisable to agree on the rent review pattern for this term as part of the initial negotiations. Both parties should agree to establish the review pattern for the option period within six to nine months of the expiry of the initial lease term.

When does my company become legally bound? Or, when does the agreement become legally binding?During a typical lease negotiation, leasing proposals are used as a medium to determine terms and conditions acceptable to both Lessor and Lessee. This will lead to a ‘Heads of Agreement’ document or ‘Memorandum of Understanding,’ outlining the fi nal position of both parties, and accompanied by a leasing deposit, often equivalent to one month’s gross rental as a security. This deposit is typically held in the leasing agent’s trust account to be off set against the fi rst month’s rental or leasing fees payable by the Lessor.

At this stage, both the Lessee and Lessor are not usually legally bound to commit to the premises (unless otherwise stipulated in the documentation to date) however, the Heads of Agreement document provides a framework by which the Lessor is to instruct solicitors to prepare formal lease documentation.

The signing of the formal lease document will legally bind the Lessee to the lease. This is accompanied by the provision of consideration (typically by way of a bank guarantee). The signing of the lease document by the Lessor will typically bind the Lessor to the lease unless otherwise agreed or stipulated.

undertake the ‘Make-Good’ on your previous premises as well as design and fitout your new premises if required.

If you are relocating, Colliers International can

The costs vary depending on the space and scope of works required, so contact you Colliers International agent for more information.

A “Make Good” is your (the Lessee’s) obligation to return the premises to its original state upon completion of your lease.

What is a “Make Good” and how much willit cost?

If the lessee retains a tenant representative to facilitate the process and act on behalf of the tenant in the negotiations, a negotiated fee would be payable to the tenant representative, (in some cases however, this fee may be paid by the landlord as a reimbursement of the tenant’s consultants fees).

If property options are sourced via a leasing representative, the agents leasing fees are paid by the landlord, thus no direct payment from the lessee to the agent is required.

Do I need to pay any fees to my agent?

Relocation checklistStep-by-step guide to the relocation process.

Colliers International has professional expertise in relocation management including the following sequence of tasks;

Preliminary• Finalise lease for new location.• Notify present landlord of relocation date.• Advise staff of date and location of move.• Finalise design for new premises (if required).• Create a master change-of-address.

Pre-Move General• Pre-book elevators and loading docks for moving day.• Tender and award moving contract.• Tender and award telephone and computer cabling.• Inventory existing furniture.• Code furniture/equipment on a colour-coded fl oor plan.• Audit keys.• Pre-order any new offi ce furniture and equipment.• Order new stationary.• File change-of-address forms with post offi ce and

forward mail.• Check your insurance coverage for the move.• Confi rm the Certifi cate of Occupancy and any other

required permits of licenses have been obtained.• Advise specialty suppliers (telephone, bottled water,

coff ee service) of new address.• Mail moving notices. - Banks and fi nancial institutions - Photocopiers - Clients and customers - Clubs and organisations - Credit accounts and credit cards - Insurance companies - Accounts receivable/payable - Newspaper and magazine subscriptions - Telephone company - Prospects and special services

• Hold a meeting at new premises in three weeks prior to move. Bring all parties involved (design/construction/removalists/cabling company/IT specialist) to ensure all details are covered off and all responsibilities clear.

• Schedule public relations eff ort, including plans for news releases, articles, “offi ce-warming” parties, etc.

• Change locks/access codes on new premises as close to moving day as possible to secure access.

• Decide on security procedures for the move.• Arrange for listing on lobby directory of

new building.• Arrange for post-move cleaning.

Pre-Move Internal• Finalise new seating plan and identify each location

so labels can be prepared.• Assign move supervisors to departments.• Develop a master relocation project schedule.• Schedule and implement a regular programme of

clean-up (purge fi les, dispose of trash).• Schedule staff for unpacking, stocking supply

cabinets, storerooms, fi le rooms e.g. and removing tags from all furniture and equipment to ensure your company will be operational as rapidly as possible after move.

• Arrange for off -site storage of old fi les.• Pack contents of all fi ling cabinets, desks. etc,

ensuring everything is properly labelled.• Arrange for staff to tour new premises a few weeks

prior to move.• Schedule post move training for security, fi re and lift

safety procedures at the new facility.• Distribute access cards and keys for new premises.

22

Relocation checklistStep-by-step guide to the relocation process cont.

Moving Day

• Arrange with the building manager to have the air-conditioning in operation during the move.

• Remove computer equipment (server) and phone system prior to arrival of movers and commence reinstallation at new site.

• Draft an emergency contact list for vendors such as elevator maintenance, building management, utilities, telecommunications and moving company.

Post-Move

of departments.• Re-install and test all computers.• Do a detailed walk-through of the premises and

report any damage to moving company.• Transfer your insurance to the new location. Obtain

Certifi cates of Insurance from your insurance company.

• Reconfi rm termination of old leases. • Collect parking passes, security cards and keys for

the old facility. Confi rm the return of any deposits held by the landlord for these items.

• Audit fi nal invoices against contracts and progress payments and pay retention.

• Complete and fi le all warranty information for all new furniture and equipment purchased.

• Confi rm the change-of-address corrections made. • Schedule press release and client announcement (if

• Re-install and test telephone system.**• Distribute new phone list and map showing location

different from moving notice).

**The re-installation and testing of telephone systems should also be considered during the pre-move phase to ensure systems are working post move.

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