The commercial leasing market in Brisbane's CBD is experiencing high vacancy rates due to the recent over supply of office space in the market. Let's face it, Brisbane has had space and land to grow compared with other Australian cities on the east coast. It makes sense as a great place to buy land and develop.
This high supply relative to demand has seen landlords offering leasing incentives to entice new tenants at record highs. Read: New Tenants = YOU New Businesses
The incentives on offer come in three forms:
Landlords who have access to capital are able to offer commercial fitout contributions that can either reduce a tenant’s fitout spend, or balance spend completely and allow for a cost-neutral fitout.
There is often wiggle room to negotiate around incentives as well: Landlords want their buildings filled after all. As such, even small businesses ought to attempt to negotiate in order to leverage incentives in making a business move.
Think less about what your company has to save when negotiating leasing incentives and instead think what your company stands to gain. Sometimes the only thing standing between your business and a more innovative approach to a particular problem is a little room on the budget. These now-common leasing incentives in Brisbane might be just the room you need.
Small businesses desperate to move don’t have to run the gauntlet of dangers of taking a more-affordable sublease when they’re able to be smart with incentives to sign a new lease.
As an example, if a small business is seeking a fitout contribution as part of a new lease, you can be clever and create a specific fitout proposal to aid negotiations with the Landlord. Having all your ducks in a line before a negotiation could make it more likely to get contribution for a fitout. Your potential Landlord will also benefit from having a fresh looking fitout in their building when showing around other likely new tenants.
As part of this proposal, a breakdown of cost and time ought to be included. Establishing what is to be included in a prospective fitout is a common problem facing prospective tenants angling a fitout contribution. In these budget-conscious times, this area needs to be addressed in order for prospective tenants to avoid poor service and over-priced fitout quotes.
It’s worth thinking about the possibilities opened up by a fitout contribution. Whilst new leases are often signed to fit a growing business or at end-of-contract – that is, to solve problems – a lease incentive such as a fitout contribution can be leveraged to breathe new life into your company that will stick around for the future.
Market place data suggests a high rate of long-term leases, it will pay to have a fitout that is future-ready: one that puts culture and technology at the centre and is accepting of the way people work today and will work in the future. Utilise a fitout contribution leasing incentive to think big with fitout: consolidate that contribution toward innovation.
If jumping in feet first isn't your style and you'd like to dip your toe in the water – consider a co-working space, of which Brisbane is also a leader for. Watch this space for more on that exciting new work space trend.
We hear about the general property market on the news all the time, along with what we should and shouldn't be doing when we rent or buy a home. How are CEOs, CFOs, COOs and Facilities Managers meant to get non biased advice about what's happening in the commercial property market?
If you would like to learn more about navigating a successful new lease, office move and new fitout, join us for a panel discussion breakfast event that includes speakers from all aspects of the journey.