Avoid Pitfalls When Renting Office Space: Essential Details You Must Know!
In a bustling business environment, considering “
office space rental” is the first step for companies and entrepreneurs to start their operations. However, with a plethora of office options available, how do you choose a space that fits your budget and is suitable for business development?
Capital International Business Center will detail the key issues to pay attention to when renting an office, helping you easily find the ideal office space.
What Details Should Be Noted When Renting Office Space?
1. Understanding Office Grades
The Hong Kong Rating and Valuation Department classifies local private office buildings into Grade A, B, and C based on their facilities and services. Grade A offices have superior facilities and services, thus commanding higher rents. For budget-conscious entrepreneurs, considering Grade B or C offices or opting for shared workspaces within Grade A buildings can save costs while still enjoying a good office environment.
2. Bare Shell or Furnished
Most office spaces are handed over as bare shells. Even if the building provides central air conditioning, tenants may still need to install fans or air outlets themselves, or even run electrical wiring from the meter room to the office, incurring significant costs. To save on renovation expenses, entrepreneurs can choose units that are not handed over yet and express their intention to retain the original decoration, but they must handle the removal of unwanted parts themselves.
If the rented office is already furnished and partitioned, the lease agreement should specify all fixtures provided by the landlord to avoid disputes when vacating the premises.
3. Large Landlords vs. Small Landlords
Larger, well-managed buildings are usually managed by big developers, leaving little room for rent negotiation. Conversely, buildings with scattered ownership have more competitive units, and some small landlords may offer more incentives to attract tenants.
4. Be Cautious of Area Calculation Methods
Unlike residential properties, office rent is usually calculated based on “Gross Area,” which includes shared areas like restrooms, corridors, elevator lobbies, and back staircases, in addition to the unit’s own area.
Some offices also provide “Saleable Area” figures, which exclude shared areas but include structural elements like walls and windowsills. This means that the saleable area might not be as “usable” as it seems.
To understand the actual usable space and the office’s spatial feel, look at the “Carpeted Area” (the area where carpets can be laid). Gross area is just a rental benchmark, so always ask the landlord for the carpeted area figures when renting an office.
5. Pay Attention to “Rent-Free Periods”
Due to the complexity of office renovation and the time-consuming process of moving, it is reasonable for tenants to request a rent-free period. Additionally, the larger the rented office space, the longer the rent-free period typically is, sometimes extending to over six months.
6. Clarify Responsibility for Various Expenses
Many office spaces do not cover management and maintenance fees. For example, if the office air conditioning has issues, tenants often have to pay for repairs themselves. Before signing the lease, tenants should clarify with the landlord who is responsible for various expenses, including rates, management fees, utilities, cleaning fees, and maintenance costs, to avoid disputes during the lease term.
7. Hire a Professional Lawyer for Assistance
Office lease terms are complex and numerous, involving more commercial considerations than residential leases. Therefore, the standard lease agreements drafted by agents in the residential market may not be sufficient. Typically, the leasing department of the developer or a law firm drafts customized lease agreements and handles the clauses.
8. Office Insurance: Essential for Risk Protection
Offices often contain valuable items, so tenants should consider purchasing office insurance to ensure property safety. When choosing insurance, understand the coverage and amount details to ensure full protection of your rights.
In addition to renting office space, companies with limited funds or smaller teams can also consider renting
business centers or
serviced offices. Capital International Business Center has branches in multiple districts in Hong Kong with convenient transportation. They also provide common office equipment like copiers, telephone answering services, and mail collection, allowing clients to focus on business development without worrying about office renovation and equipment purchases.
