For many corporate tenants, the process of moving premises is a complex exercise which should be professionally managed to optimise the investment the company is making in their property, minimise disruption and ensure the company is suitably protected legally.
As with many projects, relocation of business premises is a multi-disciplinary activity which needs careful management and coordination to define the short- medium- and long-term business objectives and budgets, search the market, negotiate lease terms, exit the existing lease and fit-out or tailor the new premises for occupation.
The typical stages of relocation include:
Exiting the existing lease – Whether this is through a natural end, the exercise of a break clause or through surrender, assignment or sub-letting.
Dilapidations – In exiting a lease the tenant often has repairing, redecoration and reinstatement obligations. If these liabilities are still outstanding after departure, then the landlord will typically serve a claim against the tenant and negotiate a settlement.
Market Search – The Client should define their objectives and criteria, to include: location and transport needs, type and size of property, budgets and length of lease required.
A holistic comparison of different options should be evaluated to include: the rental amount, likely service charge amounts, time and cost of works to fit-out or otherwise carry out alterations to support the business and any constraints that may impact on the business.
Lease Negotiation – The lease should be reconciled, as far as possible, with the tenant’s business plan and support their operations. A property lawyer will work with the tenant to ensure that the new lease clearly set out the rights and obligations of the tenant and they are suitably protected. The rental amount will need to be negotiated in line with the market as well as any rent-free periods.
Fit-Out and Other Works – Whether the new premises are delivered in a shell and core and require a full fit-out or minor redecorations, the works will need to be designed, procured and undertaken as a project. It is likely that various approvals will be required such as a license to alter from the landlord, planning and building control. Projects require careful management to ensure the works are delivered smoothly and efficiently so money is not wasted through delays and operational disruption.
Move Management – Moving is inherently disruptive and should be managed so that people, furniture, equipment and stock is relocated into the new premises. In the case of IT networks and servers, as well as heavy production equipment, the tenant needs to carefully plan and budget to provide either new equipment and systems in the premises which need to be commissioned and ready to go prior to the move, or to relocate the existing equipment as quickly and efficiently as possible.
Doyen Land advises corporate tenants on all manner of leasing issues. If you feel this would help your organisation, please call us on 0207 947 4 947.