Is A Surveyor Really Necessary When Leasing A Commercial Property?

Dec. 2, 2009 - PRLog -- A few years ago one of my clients proudly announced they had agreed a deal with the landlord’s agent on a new 4,000 sq ft office in central Cambridge.  They thought they had a good deal.  They actually agreed a deal far more expensive than an adjacent suite was let for a month earlier (which they would not have been aware of).  If they had taken my advice and let me do the negotiations they would have saved themselves over £87,000 over the course of the 10 year lease they had agreed, and had the flexibility built in to allow them to move without penalty after 3 years when they needed to.

Remember, they thought they had a good deal.

Property costs are one of the most expensive running costs an organisation will have.  It is therefore important to keep these costs to a minimum.  Instructing a local surveyor who knows the market is an excellent way of saving money and the savings will usually by far outweigh the fee.

Some questions then to ask yourself –

•   Do you have the time to trawl the market looking for a new property when you should be concentrating on your job?
•   Do you have time to speak to all the local and national agents who are marketing properties in your search area? Do you know about “off market” opportunities which may suit?
•   Do you know the market?   By this I mean do you know how long the property has been on the market, do you know what rent you should be paying?  Do you know how keen the landlord is to let the property?  Do you know what a similar or adjacent building let for recently and on what terms?
•   Do you know what incentives you can negotiate?  Can you agree a discount/rent free period, cap the service charge, and limit your repairing obligations under the lease?  Might you need to move in 2/3/5 years time and can you agree a break clause to suit without penalty?
•   Do you know how big the property is?  Do you know your Gross Internal Area from your Net Internal Area, and what is and isn’t included in the floor area measurement?

If you are paying rent on an agreed amount per square foot, wouldn’t you like to ensure your property has been measured properly so you are paying the correct rent?   The Royal Institution of Chartered Surveyors guidelines allow a difference of 1-10% depending on circumstances, which does allow plenty of scope for uncertainty, even though Chartered Surveyors have a duty not to mislead, intentionally or not.   Measuring an office is not just a simple wall to wall measurement.  Examples of what is not included in an office are: kitchens, some corridors, cleaners cupboards, common areas in a shared building, some entrance lobbies, areas below 5 foot height, columns, some heating systems etc etc.

For example, with a small office in central Cambridge which is supposedly 2,000 sq ft, a 5% difference in floor areas could cost a tenant an additional £2,300 a year in rent.  On a 30,000 sq ft office a 5% difference in floor area could cost the tenant £37,500 per year, so this shows the importance of getting the measurement right.
Employing a local Chartered Surveyor to carry out an extensive search of available and "off market" properties, together with having the market knowledge, contacts and negotiating skills, is vital to ensure you are getting the best deal, whilst also saving you time and allowing you to concentrate on your business.

Surveyors can also put you in touch with suitable recommended solicitors, fit out companies, building surveyors, utilities companies etc to assist with your move if required.

If your company is based in East Anglia and you would like to know you are getting the best deal, please contact Johnny Goodman at Goodman Property, telephone 01223 873195, or email jg@goodmanproperty.co.uk. Website www.goodmanproperty.co.uk.

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Chartered Surveyor dealing with commercial property sales, lettings, acquisitions in Cambridge and 35 mile radius. Please speak to me for all commercial property needs in the area. 14 years experience in the property market.