There are lots of considerations in making a stay v go assessment. Our step-by-step guide will help you to make an informed decision and ensure nothing is missed along the way.
Initial steps
The first step is to assess what the perfect space looks like and where it should ideally be located. It is also important to review your lease and identify any issues with the building that need to be addressed during negotiation. You need to establish:
- A business plan - a three to five-year plan in terms of head count, brand positioning and technology.
- A workplace audit – How does your workforce use office space, and will the environment attract the best people to the business? An analysis of roles is essential and has a direct impact on technology and space requirements. How much space should you allocate for concentrating, making conference calls, formal and informal meetings and collaboration between colleagues. What policies should be implemented to encourage positive behaviours? Do you have a robust remote working policy? A workplace audit can add one to three months to the process, but the results will inform the space requirements.
- Location analytics – making the commute easier is usually near or at the top of most people’s wish list when it comes to the office location so it’s important to consider existing and planned transport infrastructure and the resilience it provides. Other considerations include food and beverage options, shopping facilities, the availability of suitable stock and occupational costs. Carrying out an analysis of employee postcodes alongside a consideration for future talent may help to focus the decision making and search criteria.
- Existing lease analysis – if you need to exercise a break clause, it is important to check and understand the break clause conditions (for a detailed guide on break clauses see want to move offices – make sure you understand your break clause). You should also check whether the lease is protected by the security of tenure provisions of the Landlord and Tenant Act 1954 especially if more time is needed ahead of a relocation. It is also important to understand the repairing obligation and formulate a strategy on dilapidations. If you need to carry out dilapidations works, the time taken for works needs to be considered at the outset and its impact on the overall programme.
- Building analysis – this is relevant to staying or relocating. What is the current performance and anticipated life of the air conditioning system? If works need to be done, who should pay for this, the landlord or the tenant? Are there any existing or anticipated problems with the building or is there a risk of major expenditure (for example refurbishment of common parts) and should you have to pay for this, or can it be excluded from your liability? A building surveyor and M&E consultant can investigate these issues on your behalf, and it is then important to interpret what this means for you and how to consequently approach negotiations with the landlord.
Additional considerations
Some other issues to consider at an early stage:
- Covenant strength. How the landlord perceives your ability to pay the rent and maintain obligations under the lease will have a direct impact on the terms of the deal. You should present your covenant information thoughtfully and explain any irregularities, strengths or weaknesses.
- Furniture audit - at a basic level this is an assessment of what you need, what you can take and what stays. We are also seeing clients using furniture solutions as a way to reduce capital expenditure on office fit-out, especially if taking a short term lease commitment.
- Fit-out – will you need to refurbish, fit-out new space or take space that is already fitted? Consider the options available and consequent implications on delivery team needed and timescales involved.
- IT/Telecoms - what are the lead-in times and is a wayleave required?
Implementation and timing
Here’s a step-by-step look at what happens and how long each phase is likely to take. These timescales are indicative only and each stage can be shorter or longer dependent upon circumstances:
1. Search – 6-8 weeks
A thorough market search and undertaking inspections can be done quite quickly but often takes longer than you anticipate with an aim to create a shortlist of 2 to 3 buildings. Initial discussions with the existing landlord should also take place at this point.
2. Negotiate – 2-4 weeks
It is essential to leave a decent amount of time to leverage the best terms (for a guide on how to negotiate heads of terms see leasing office space – how to approach heads of terms negotiations). Being in a pressurised situation rarely results in securing the best terms and often allowing an additional few weeks can make all the difference. A cash flow analysis and assessment of costs can be produced at the end of this process to aid balanced decision making either to stay or relocate.
3. Legal process – 6-8 weeks
It is wise to appoint a solicitor at an early stage to allow sufficient time for compulsory anti-money laundering checks to be carried out and searches to be put in hand. At this point, if it has not already been done, there should be a building and M&E survey. For multi-tenanted buildings, this should consider liabilities that will fall under the service charge in addition to direct liabilities. A licence to alter for any fit-out works or other changes and wayleave for telecoms (if required) should also be sought at this stage.
4. Fit-out – 8-14 weeks
Consider the appointment of an independent project manager as early as possible to effectively advise and coordinate this process. An average fit-out will take 12 weeks but larger, traditionally procured fit-outs can easily take six months plus.
5. Move – 1-6 weeks
This is not just the furniture but also the relocation of staff. It can be done over a weekend, but larger moves are sometimes phased. Remember to allow enough time to carry out any works required under your existing lease. It may be possible to agree a cash settlement in lieu of any dilapidations but this will also take some time to settle.
The relocation or renewal process can involve unexpected hurdles and frustrations along the way but following these steps and allowing sufficient time really is key to getting it right.
