Gauteng Business News

Send  Share  RSS  Twitter  24 Feb 2011

PROPERTY: Advice for Tenants When Looking for New Commercial Premises


Recent Gauteng Business News

When seeking to relocate or looking to lease commercial premises for the first time, tenants are faced with a host of factors which need to be considered in order to ensure that their final decision is the right one to suit their requirements.

Sean Liebenberg, senior manager, facilities management, for JHI property services group, offers sound advice: “From years of experience in managing extensive commercial property portfolios for clients, JHI has identified a number of key issues of importance.

“Firstly, location plays a major role in deciding where to situate an office, or lease space. Whether it be for image, proximity to clients, the market or staff residential areas – and transport networks, choosing the right location should take into account a balance of factors that will optimise business opportunities and productivity. Consult a property broker for advice on available premises in your preferred area and at the appropriate rental cost of various grades of office space. Once a budget is determined, consider the options which provide best value for money.”

He says in terms of services, a prospective tenant needs to establish what is provided for in the lease, or not. What security measures exist and is there access control for vehicles, pedestrians and visitors at reception? Are the premises separately or communally metered in terms of electricity and water and how will your consumption charges be levied, or are there energy efficiency options, and what about back-up power in the event of power outages?

Says Liebenberg: “A prospective tenant needs to establish the condition and number of ablutions and how often they are cleaned, as well as the cleaning of common use areas such as passages, communal kitchens, reception areas and basements. Are there any pest control management services in place and are there external garden areas that are well maintained and irrigated? Is there day-to-day maintenance - for instance, are lights in common areas working, do the finishes in the common areas look well maintained or tatty and unkempt? Bear in mind that depending on the grade of building the quality and state of finishes will vary from ‘as good as new’ to acceptable and functional.

“If the building is more than two storeys high are there lifts or escalators and are these in good working order, and is there a maintenance contract in place so that breakdown and safety issues are addressed regularly? Is there a goods lift – important when moving in or if the tenant’s business requires the storage of goods and products or materials.”

He points out that many prospective tenants are not aware of the actual space available for planning when renting space in commercial office buildings. There are two areas in question when an area is quoted to rent. The area on which most tenants will be quoted is the rentable area. This comprises two components, namely the actual usable space and common areas such as toilets, passages, lift lobbies etc. Any rentable area quoted for offices will contain a varying ratio of common area. A useful tip is to enquire how large the common area component of the rentable area is, especially when comparing one space to another. Tenants need to try to get the common area portion as low as possible, as they want to have the most usable area available for their offices, in order to maximise their business operations.

Tenant allowance is another issue which varies from one landlord to another. Says Liebenberg: “Depending on the grade of the building, rental paid and length of the lease, the landlord would consider contributing an amount towards the fit-out of the premises. A rule of thumb guideline for tenant installation is one month’s worth of rental for every one year leased. Some landlords may consider a rent-free period in lieu of the tenant allowance – either way the higher the rental the tenant can afford or longer the term of the lease, and dependant on the grade of the building, the more beneficial the fit-out contribution or rent-free period will be.

“Tenants need to do their homework in assessing the space required. How many people need to be accommodated, both immediately and from a growth perspective over the lease term? Do they operate in cellular offices or open plan environments, how big should these spaces be? Take into account common facilities such as reception, waiting areas, meeting rooms, kitchens, storerooms, printing/copy/fax areas and display areas. Consider space between offices for passages, walking space between open plan desks. In practice 10-15 percent secondary area factor should be applied, depending on furnishings,” he says.

Important details such as physical constraints should be taken into account when laying out an office, eg structural columns such as those in older buildings, which may get in the way; external window configurations, which can affect interior planning both in terms of space planning and maximising external light usage. Are ceilings high enough for the tenant’s requirements, such as raised access flooring needed for the server room or auditorium/training room terracing? Generally office floor to ceiling heights vary between from 2.6-2.8m with enough space in the ceiling void above for lighting, ducting for air-conditioning and data and communications cabling. What kind of air-conditioning exists - is it cold and heat adjustable, do the window cassettes take up any internal space, or can the tenant install a new system to suit their requirements?

Liebenberg reminds that one should determine if sufficient parking is available to cater for all staff. Depending on location and municipal by-laws, the parking ratio may vary eg four parking spaces per 100sqm constructed. Are parking bays in the open, under shade net or in a garage, or are these in rented parking available close by, via a park and ride solution or public transport services, and what about visitors’ parking, particularly if the business relies on public /client consultations or visitations.

He adds: “Find out about occupational health and safety aspects of the building – ensure there are evacuation routes and fire escape stairs, and systems and equipment critical to detect, prevent or fight fires eg sprinkler systems, smoke detection, fire alarm, fire hydrants and extinguishers and first aid kits. See if safety equipment maintenance records are up to date and ask whether regular meetings of the Occupational Health and Safety committee are held and if the safety procedures are tested.”

Over and above highlighting these issues to be taken into account when considering a new lease and planning offices, JHI recommends that prospective tenants seek advice from specialists in order to get the best solution and premises in line with their requirements.

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