When looking for a commercial property to lease, most people focus on the rental price and can overlook the outgoings. This can be misleading because when you lease a commercial property, as a tenant, you are required to pay both rent and outgoings.
Outgoings include the running costs of owning a commercial property and generally all of these are paid by the tenant.
Outgoings on a commercial lease are the additional costs to rent included in the commercial lease agreement that tenants are required to pay.
Outgoings of a commercial lease can include maintenance costs of the property, council and water rates, strata fees, and insurance.
Here’s a comprehensive list of potential commercial lease outgoings:
Council and local government rates
Water and sewage rates
Ongoing property services – e.g. pest control, security, and test and tag
Property management fees
Property condition reports & inspections
Maintenance costs – e.g. gardening, cleaning, air-conditioning service, and window washing
Rubbish removal and collection
Who Pays the Outgoings on a Commercial Lease?
In a commercial lease, the tenant generally pays all of the outgoings including property management.
The tenant also pays land tax, but on the single ownership basis.
During the lease negotiations for the property, it is critical that all parties discuss the commercial lease outgoings – what the tenant will pay – and include these costs in the disclosure statement.
What Commercial Property Outgoings Must be Paid By the Owner?
While the outgoings for a commercial property lease are paid for by the tenant, retail leases are slightly different whereby there are certain outgoings that the owner is restricted from passing on to the tenant.
These can include costs for the lease or property management fees.
Other outgoings that cannot be included in the lease agreement:
Personal costs of the landlord
Costs associated with capital improvement of the property
How to Calculate Outgoings of My Commercial Lease?
A commercial lease agreement that requires the tenant to pay outgoings, must include estimates of the future outgoings.
As a tenant, it’s critical to read all of the commercial lease agreement and disclosure statement to understand which outgoings you’ll be liable to pay, what percentage you’ll be paying, and when you’ll be required to make payments.
If you’re in the market to find a commercial property for rent it can feel overwhelming – especially if you’re not a commercial property expert. By educating yourself before you begin to look for a property, you’ll reduce your vulnerability to misleading sales tactics and undesirable lease agreements, resulting in a better outcome for your business.
Therefore, we’ve put together a foolproof guide with tips and tricks to help you become better informed on finding the best commercial rental in Perth.
The less time you allow yourself to research and find a commercial property to rent, the more pressure you’re putting on yourself find the perfect lease. This will decrease your negotiating power and increase the likelihood of a rushed decision.
We recommend planning 6 months in advance and giving yourself plenty of time before you need to sign on the dotted line. The more time you have ahead of the crunch increases your flexibility and puts you in a better negotiating position. You’ll be more aggressive when negotiating lease agreements and may even get a rent reduction.
This planning time will help you be more informed on what spaces are available and how the commercial rentals you’re considering compare to others on the market. You can also speak to your colleagues about what considerations they have for the new space. You may need a bigger office, a larger air conditioning system, or a fixed boardroom or meeting space. Making time for colleague input will ensure team members are also happy with the transition.
What Can You Afford?
Before you consider looking for a new commercial rental, it’s important to have a sound understanding of what rent you can afford to pay over the course of the lease. It’s smart to set a strict budget, as we often tend to push beyond our limits when we see something we love. Sticking to the budget will ensure you reduce placing yourself in a rocky financial situation by committing to something you can’t afford.
Review The Property Market
Keeping an eye on the property market will mean you have the opportunity to jump on a fantastic opening if it arises and the market drops. By having this leverage, you could save yourself thousands of dollars in rent.
By keeping an eye on the websites of commercial real estate agents, you will be able to see what properties have been sitting on the market for the longest duration. Giving you the opportunity to negotiate better terms for your lease.
What Do You Need to Consider?
Now you have assessed the commercial rental market, it’s time to consider what you need from your new property.
Here are our top tips on what you should look out for.
The newest commercial rentals will sit at the top of commercial real estate websites, but sometimes agents will pay to move old listings to the top. To ensure you have a solid understanding of which properties have been on the market for the longest time, head to the commercial real estate agents website to find their list of commercial properties and head to the back of the list.
The oldest listings will often provide the most value when it comes to negotiating. If the property hasn’t sold it may be due to a number of reasons, such as price or location. If one of these listings suits your requirements, you may be able to negotiate a better deal.
One of the main criteria commercial real estate is valued on is features. Generally speaking, the more features a property has, the higher the rental price will be. If you have a sound understanding of which commercial property features are and are not valuable to you ahead of negotiating, you may be able to lease the property at a lower rate. If you do not require a property with extended office space for example, you can work with the real estate agent to negotiate down the premium placed on this feature.
Be In The Know
By subscribing to email lists of agents leasing commercial properties in Perth, you will be the first to know when a new listing appears on the market and have the opportunity to be the first to view it. This means you lower the chance of having any competition to lease the property, resulting in better negotiating terms for the lease.
Belmont is one of the most centrally located commercial property areas in Perth. It’s perfectly situated between Perth CBD and Perth Airport and bordered by main highways that can quickly transport large freight, as well as make for an easy commute for staff.
Belmont is a popular location for many Perth offices and warehouses for lease because, compared to Perth’s other industrial areas, travel and distribution times are very quick and direct. It won’t take you long to get onto a highway heading in any direction in WA. Great Eastern Highway and Canning Highway run from eastern WA, past Perth Airport and straight through to Fremantle Port, as does Leach Highway.
Belmont’s commercial real estate for lease is primarily warehouses, offices and office warehouses, catering to a range of industrial and commercial businesses. As a light industrial area, Belmont can accommodate heavy machinery and trucks, and Belmont’s growing residential, retail and office real estate are fueling population growth.
Here’s the commercial real estate available in Belmont and why you should consider Belmont for your next commercial lease.
Warehouses for Lease in Belmont
Belmont’s warehouses for lease range from huge industrial properties of over 2,000 square metres to tidy little office warehouses less than 500 square metres. Belmont has been a prime commercial property location for decades which means you’ll be able to find older properties from the 80s that have been refurbished up to recent constructions will all the modern facilities. This variation means, no matter what your budget or requirements, Belmont will usually have a warehouse to suit your needs.
Why lease a warehouse in Belmont?
As the most centrally located industrial area in Perth for the airport, freight rail line and CBD, Belmont offers increased efficiency for delivery of goods and access to other industrial supplies. Leasing a warehouse in Belmont puts your business minutes from Perth city, Perth Airport and freight rail lines.
Belmont’s wide freeways and truck-friendly intersections are designed to support Belmont’s position as one of Perth’s most industrial areas. The City of Belmont is committed to maintaining Belmont as one of Perth’s most productive areas. This means ongoing improvements to infrastructure to support the area.
Offices for lease in Belmont are located just across the river from Perth CBD and are mostly situated in modern office complexes or attached to a warehouse property. Belmont is one of Perth’s most commercial areas and in recent years has shifted from predominately industrial to mixed business with the construction of several large office complexes and businesses hubs within the suburb.
Why lease an office in Belmont?
Offices in Belmont are strategically placed to offer services to Belmont’s industrial area, Perth city, Victoria Park and Perth’s south-east. There are over 3,500 businesses within the City of Belmont, making it one of Perth’s busiest commercial hubs.
Travelling to the office or out to visit clients is made easy by main highways providing access to all of Perth. The City of Belmont also provides a free shuttle service for workers from Belmont Forum to their offices in Belmont Business Park.
The upcoming construction of the Forrestfield-Airport Link, due in 2021, will connect Perth Airport and the Perth foothills to Perth city via a railway station in Belmont, adding to Belmont’s strategic location and commercial value.
The recent retail and apartment developments along Great Eastern Highway and the redevelopment of Belmont Shopping Centre has increased the residential population of Belmont as well as the need for professional services.
Due to Belmont’s strategic location as a business hub and an ideal distribution and logistics site, many of the commercial properties in Belmont are office warehouses. Office warehouses in Belmont vary is size and configuration, allowing you to choose a commercial property that suits your business, whether that’s a larger warehouse and small office, or vice versa.
Some office warehouses in Belmont include a showroom to display your goods and serve as a retail store. For many businesses that would otherwise have to operate from several commercial properties, Belmont offers a location where your enterprise can be consolidated and become more efficient.
Why lease an office warehouse in Belmont?
Leasing an office warehouse in Belmont will enable your business to efficiently provide goods and services throughout Perth and WA, while also positioning your staff in an easily accessible location. An office warehouse in Belmont can provide your business with the opportunity to serve as the manufacturing, distribution and retail site for your company. Reducing transport costs and allowing for fast communication within the company.
Leasing an office warehouse in Belmont gives you the flexibility to find a property configuration that will suit your needs and enhance your business.
As a business owner, you may be thinking about getting an office and one of the biggest decisions you will make is choosing between renting an office space or leasing or buying an office.
We’ve been selling and leasing offices in Perth for over 30 years and have extensive experience helping business owners make the right decision for their business and their finances. We’ve listed the pros and cons of renting an office space vs leasing an office vs buying an office, to help you decide which is the right option for your business.
Renting an Office Space
Renting an office space usually refers to a short term lease for one office or desk in an existing office complex. You’ll have the option of “hot desking”, “co-working” or renting an office for yourself.
The facilities will depend on each office space but can vary from large offices with views in high rises in the CDB to communal areas where you can use any available desk. Office space rental prices will vary on the type of office space, the building, facilities and amenities with rental terms from 1 hour to 1 month.
Pros of Renting an Office Space
Flexibility: You can rent an office space in Perth by the hour, day, week or month.
Availability: Most office spaces for rent that are listed are usually available immediately.
Only Get What You Need: You don’t need to think about the office space size you’ll need in 6 months or a year. Only pay for the office space you need right now.
Networking Opportunities: If you choose co-working with others or hot-desking, you’ll have the opportunity to meet other businesspeople and build your network.
Amenities Are Provided: Most office spaces for rent come with printing facilities, coffee/tea and internet.
No Maintenance Costs: You won’t need to pay for a thing but your rent. Everything else is paid for by the owner.
Low Commitment: You won’t need to commit to a year-long contract. The longest commitment for short term office space is a month.
Central Locations: By renting an office space, you’ll be able to choose a location that would otherwise cost a lot more to lease or buy. This is a huge pro if you need to have meetings in a CBD.
Less Responsibility: You’re not responsible for anything apart from your rent costs. You can focus on your business and not maintaining the office.
Tax Deductions: The costs of renting an office space can be tax-deductible.
Cons of Renting an Office Space
Shared Office Spaces: Renting a shared office space means you can have other people in the same room or even on the same desk. This could be a distraction or impact your productivity.
Less Control: You’ll be at the mercy of the environment in the office space, this could be noisy people in the hallways, music from another room, untidy areas, low internet speed or poor lighting.
No Branding: Because of the short rental lengths, landlords will be reluctant to add any signage to the office.
No Power: Owners can decide not to offer renewals or rental extensions of the office space without warning.
No Equity: You’ll be spending money on your business but it will be going straight to the office space owner and not building equity for you.
Leasing an Office
Leasing an office refers to long term leasing of a whole office building, multiple floors of offices within a building or a suite within an office complex. It will usually include private amenities and facilities like parking, toilets, storage and kitchen.
Lease terms are negotiable but are usually between 6 months and several years, providing businesses with security that they can occupy that office for a long time.
Pros of Leasing an Office
Stability Without a Large Financial Commitment: Leasing an office will allow you to secure an office for years without having to outlay the high cost to buy an office.
Low or No Maintenance Costs: The owner will bear most if not all of the costs for repairs, upgrades and ongoing maintenance.
Tax-Deductible Lease Payments: Your payments for leasing an office can be tax-deductible
Prime Locations:Lease an office in a prime industrial location or CBD, at a fraction of the cost of buying an office.
Can Be Cheaper to Lease Than Buy: Depending on the commercial property market, it may work out cheaper to lease an office than buy one.
Easy to Leave: If you’ve outgrown the office space or need to change for another reason, you can exit at the end of the lease without the process of selling an office property.
Branding and Street Presence: You’ll be able to negotiate with the owner to add your signage to the building and your office.
Free Up Cash for the Business: Avoiding the large financial commitment of buying an office will keep cash available to spend on your business.
Choose a Long or Short Term Lease: You’ll be able to lease an office with contract length that suits your business.
Cons of Leasing an Office
Increase in Lease Payments: It’s fairly standard for your lease payments to increase either after a certain term or if you choose to renew the lease.
Owner Has the Power: The owner may choose not to renew your office lease and you’ll be forced to move from the office.
No Say in Repairs and Maintenance: The landlord has the power to determine which repairs are done and when.
Buying an Office
Buying an office can be a whole office building, multiple floors of office within a building or an office suite within a complex.
Buying an office gives you full control of the property but can cost significantly more than renting an office space or leasing an office.
Pros of Buying an Office
Build Equity: Owning an office will become one of your largest assets and you’ll be able to borrow against the equity of the property.
Capital Growth: The value of the office will grow with the property market.
Freedom to Make Changes: You’re in control of everything and develop the property as you see fit. No more landlords.
Expanded Income: Lease out extra space in the office or the entire office if you decide to relocate.
Steady Payments: Your mortgage payments will be steady as opposed to increasing office lease payments.
Tax Deductible: Interest payments and depreciation are tax-deductible.
Cons of Buying an Office
Large Upfront Costs: You’ll be paying a significant amount to buy the office as well as taxes and fees.
Less Cash for the Business: The money you spent buying the office could have been used for other areas of the business.
You Pay for Everything: You’re the landlord, all fit-outs, repairs, rates and maintenance costs are paid by you.
Lack of Flexibility: You’re financially invested in the office and can’t relocate as easily as renting or leasing an office.
Financial Risk: If you can’t afford the cost of the office, you may put your personal assets at risk.
Selling Could Be Slow: There’s no guarantee that you’ll be able to sell the property if you need to. You may lose money if the office sits on the market for too long.
Could Sell for a Loss: If the market is down you may make a loss if you sell at the wrong time.
Get Advice from Local Experts
Before you commit to one of the options above, speak to the Perth commercial real estate team at Ross Scarfone Real Estate. We specialise in leasing and selling offices and warehouses in Belmont and the surrounding areas.
You’ll be able to tour the available office properties and we can discuss options that will suit your business and financial positions.
If you’re thinking about a new warehouse to lease in Perth, or anywhere, it can be an overwhelming task and unless you’re a commercial property expert, it’s easy to feel that you’re under-informed. All of this can lead you to make a poor decision on the warehouse you rent and it having a significant impact on how your business runs for the length of the lease.
Fear not! We’ve gathered some Perth commercial property experts to put together a list of easy to understand tips that will help you be better informed when looking at Perth warehouses to lease and put you in a better position to negotiate the price of your rent.
What To Do Before You Start Looking at a Warehouse to Rent
Plan Ahead…Far Ahead
Looking for a warehouse to rent just before you need one puts you under pressure to find one to lease and it puts you in a weaker negotiating position. The longer lead-in time you give yourself before you need to lease a warehouse, the better your negotiating position will be. You’ll be more informed of what properties are available and how the warehouses you’re considering compare to others that have been in the market.
Planning at least 6 months in advance will also give you enough time to better understand the requirements you have for your next warehouse rental. In this time, you’ll be able to speak to your managers to learn what they think the features of your next warehouse should be. For example, you may need extra loading bays, larger office space or more advanced safety requirements.
Keep an Eye on the Commercial Property Market
By monitoring the commercial real estate market in Perth, in particular warehouses to lease, you’ll give yourself the opportunity to jump on a deal if the market dips. This could end up saving you thousands of dollars in rent each year.
If you’re watching the warehouse lease listings of local commercial real estate agents, you’ll also be able to see which have been sitting on the market for the longest time. This could mean that the owners are eager to get the warehouse leased, giving you an opportunity to negotiate better terms.
Commercial Property Expert Tip #1:
The latest warehouses on the lease market will usually sit at the top of the major commercial real estate websites, but sometimes old listings will be advertised at the top of the list. To get the best understanding of which warehouses have been on the market the longest, head to the website of the commercial real estate agent to find their list of warehouses and head right to the back of the list.
Commercial Property Expert Tip #2:
Subscribe to the email mailing lists of the commercial real estate agents that lease warehouses in Perth. Commercial property agents will regularly send out emails and you’ll be the first to know when a new warehouse appears on the leasing market, and you can be the first to view it. Potentially meaning you won’t have any competition to lease the warehouse, and you will be able to negotiate better lease terms.
Know Your Limit
Before you even consider looking for a new warehouse to lease, you need to have a comprehensive understanding of what rent you can afford to pay. Once we see something we like, we all tend to push beyond our budget to get it. By setting a strict budget for what you can afford, you’ll reduce the risk of putting yourself in a risky financial position by overcommitting.
What to Look for in a Warehouse to Lease
Now that you’ve done your research and are prepared to start looking at warehouses to lease in Perth, here are a few tips from commercial property experts on what to look for.
When looking at a warehouse to lease, you not only need to think about square metres, you need to think about cubic metres. The cubic meterage of the warehouse will allow you to calculate how much storage space you have.
When considering a warehouse to rent, it’s important to look at the height of the building and whether your storage racks, equipment and machinery will fit. Make sure to measure the height of the access doors as well when looking at the height of the warehouse, you need to be able to get your equipment inside the warehouse.
If you’re not storing stock in the warehouse or have tall equipment, you may not need to lease a warehouse with a high ceiling and can focus on finding a renting a warehouse with lower ceilings.
Commercial Property Expert Tip #3:
If you know which warehouse features are, and aren’t, valuable to your business before you start negotiations, you may be able to lease the warehouse for a lower rent. For example, some businesses will need a warehouse with a high ceiling and will end up paying more for this feature, but if high ceilings aren’t as valuable to your business, you can negotiate down the premium placed on this feature.
Commercial Property Expert Tip #4:
When it comes to warehouse space, it’s better to overestimate what you need, rather than underestimate. You don’t want to be looking to lease a new warehouse in a years’ time because you’ve expanded beyond the space.
Will You Need Office Space?
Most warehouses for lease come with a small office for a manager to oversee the staff, but if you’re looking to run your entire business from one location, you’ll need an office warehouse to rent. Once you decide you need extra office space in your next warehouse, there are a number of additional factors to consider.
How Much Office Space Will You Need?
You can roughly calculate the square metres you’ll need for your office, by adding up the number of employees you’ll have in the office as either a:
You should know a warehouse, inside and out, before you even start negotiations. There are a number of things that you could assume are up to scratch only to find out later that it’s not! Here are a few warehouse features you should ask about with every property you view.
Air conditioning and heating: This needs to be able to deal with your staff and any machinery that might be generating heat. If you have stock that needs to be stored at a certain temperature, you need a climate control system you can rely on. Enquire about the age of the warehouse’s systems and when they were last serviced.
Safety and security: Your entire stock and machinery inventory could be stored in your warehouse, not to mention your staff. You need a security and safety system that will protect everything in your warehouse from fire and burglary.
Commercial Property Expert Tip #5:
If you’re going to be running machinery in your warehouse, potentially all day, you want to know that the warehouse’s wiring has the electrical capacity to handle the workload.
What Are Your Distribution Needs?
The distribution of your products and intake of supplies is a major aspect of your business and you need to know that the warehouse you lease will be able to streamline your receiving and distribution as much as possible. Here’s what our expert suggest you keep in mind when looking for a new warehouse to rent:
Loading docks: If you need loading docks, make sure they will suit the types of trucks you’ll be using and the area around the loading dock is large enough for them to maneuverer.
Access to freeways: How far will your vehicles have to travel to access the major freeways that can take them both around Perth and interstate?
Commercial Property Expert Tip #6:
Be aware of the council restrictions on heavy vehicles around the warehouse. Certain residential zones prohibit trucks and industrial vehicles from travelling through them, meaning you and your suppliers may have to go around the entire area.
Ready for a new office in Perth? Before you lease an office, read our 10-page guide and make the best decision for your business. What you’ll learn to give you the most negotiating power:
🔘 When to look 🔘 Calculating your projected growth 🔘 How many sqm per person you’ll need 🔘 Prioritising building features 🔘 Get the location you want for less 🔘 Understanding the lease agreement 🔘 Fixed vs variable rent 🔘 What is a “make-good” clause?
Download the guide to finding an office in Perth.
Make better business decisions
Whether you’re looking to grow your business, expand your investments or shift into a new market, if you need to lease office space in Perth there are a number of things you need to consider.
Leasing an office can be a daunting task, there can be a lot of money at stake and you could be making a choice that will impact the profitability of your business for the next few years.
In the free download “How to Choose an Office Space to Lease in Perth”, we take you step-by-step on what you need to do to successfully lease a Perth office that you’re happy with, starting from 6 months before you need to move.
Why You Need This Guide
Not only does this guide detail what you need to consider when leasing your ideal office, but it also includes tips on how to give yourself more negotiating power when it comes to signing a lease for a Perth office property.
We’ve created a guide of the top 8 questions you need to ask yourself before leasing an office. This guide is a must-read for any business looking to rent an office in Perth.
Ross Scarfone Real Estate
Sphere Office Park
Suite 22, 63 Knutsford Avenue Belmont WA 6104