OS Colliers Office tenant guide

Colliers

Occupier Services

A strata-titled building is a building in which multiple landlords own different units. Most MNCs will choose not to be located in a strata building, as it makes discussions surrounding growth in the building more difficult.

In addition to the rent, tenants typically pay a portion of the costs associated with managing and maintaining the building.

In almost 100% of cases, a tenant is required to hand the premises back to the landlord in the condition in which it received it. This means that all of the furniture and partitioning you put in when you took possession needs to be removed. For this reason, it is im portant to factor reinstatement costs into your budget. Generally, higher spec buildings will cost more to reinstate.

. M Management fee/service fee/ CAM

. R Reinstate ment/make good

. S Strata‑titled

Renewal option/option to renew

Sublease

The actual useable area inside your premises. This is measured from the inside walls and does not include any common areas or any internal structures such as supporting columns. In some markets, this is referred to as the ‘carpet area’.

The tenant’s right to renew the lease for an agreed period of time.

A lease by a tenant of part or all of a leased premises to another party. That party becomes the subtenant and the original tenant the sublandlord. The key distinction between a sublease and an assignment is that under a sublease, the original tenant retains the rights and liabilities of the original lease and continues to pay rent to the landlord as before.

. N Net area

Net effective rent

Rent review

Uninterruptible power supply. This allows critical systems to keep operating for a short time, even if there is a power cut.

The actual amount payable after factoring in all the landlord’s incentives such as rent-free periods. The calculation for the net effective rent is the total incentive provided by the landlord divided by the lease term subtracted from the monthly rent. It is important to note that on a monthly basis you are not paying the net effec tive rent, you are paying the higher ‘gross rent’.

A provision in the lease that allows the landlord to adjust your rent during the lease term. The rental adjustment can be made back into line with market. The frequency of rent reviews and the structure of the increases are predetermined before the lease commences.

. U UPS system

Net rent

Rental cap

The rent payable excluding any management fees.

A ‘cap’ is the maximum amount by which your rent can increase when you renew your lease. It is not always possible to negotiate caps into lease agreements, but good real estate advisors will try to have them included in order to make more certain your maximum rental liability for more than just the initial term. This is particularly important when lease terms are short and the parties will likely be looking to amortise their fit-out over more than just the initial three years.

A specialised service aiming to leverage space, technology and HR policies to support the changing nature of work, increase produc tivity and save costs.

. W Workplace strategy (‘WPS’)

PM is the discipline of initiating, planning, executing, controlling and closing the work of a team to achieve specific goals and meet specific success criteria. In the real estate world, this generally re lates to the management of the fit-out construction when moving into new premises and then managing the reinstatement when moving out.

. P Project management (‘PM’/’PjM’)

Rental collar

The opposite of the rental cap. A ‘collar’ is the maximum amount your rent can decrease upon renewal.

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