Navigating your next office project
How to decide whether staying in your office or moving into a new one is the best option for your organisation
Your office space impacts almost every aspect of your organisation. Ideally, it must stand up to operational efficiency, employee satisfaction, optimal space utilisation, meeting sustainability targets and allowing for future expansion. That's why the decision on whether to stay in your current space or move to a new location is so important.
If you choose to stay, there may be opportunities to renegotiate your lease or secure financial support for fit-out costs or rent-free periods, making this option appealing. However, potential renovation disruptions and challenges in meeting sustainability targets in older buildings should not be underestimated.
On the other hand, relocation offers the chance to transition to a modern office space that better aligns with your organisation’s spatial requirements, environmental objectives, and evolving work models. Modern buildings often provide amenities such as business lounges and health and wellness facilities. The long-term benefits can be substantial despite the potential for higher initial costs due to fit-out requirements and logistical hurdles.
You’ll need to critically consider your next office space to evaluate whether to move or stay. Knowing the pros and cons before you start can help you create the best workplace for you and your people.
Below, we’ve laid out the pros and cons of staying versus relocating to help you make the best possible decision for your business.
Staying
| Pros | Cons |
|---|---|
| Retrofitting allows you to retain your current location, maintaining proximity to clients, customers, and key resources. Refurbishing your office also allows the opportunity to make modifications without significant capital investments. | Retrofitting can be less disruptive to business operations compared to a complete relocation as employees can remain in the same location during the renovation process. However, If the work cannot be phased to mitigate disruption, you may need to temporarily have teams work remotely or potentially relocate temporarily which can add to your project costs. |
| You could potentially use tenant improvement dollars from the landlord to offset the costs. | Escalation of costs for labour, materials and soft costs like professional services fees have continued to rise as high as 30% in the Asia Pacific region*. |
*Source: JLL Research
Relocating
| Pros | Cons |
|---|---|
| Relocating offers more flexibility in terms of choosing a location that aligns better with the company's needs, growth plans, and brand. | It requires careful planning to ensure you have enough time to locate your new space, negotiate a new lease, return your existing space to a landlord-approved condition, designing and building out the space and then relocating. |
| Relocating can allow for consolidating multiple locations into a single space or expanding operations to accommodate future growth. | You could have several end-of-lease obligations within the current lease, including make-good costs. |
| You can select your new space based on your organisation’s top priorities (e.g., flex space, wellness, neighbourhood amenities, technology, and corporate sustainability requirements. This helps reenergise employees, enhance productivity, and can align with your environmental goals. | You might need a longer lease term to justify the capital expenditure. |
| By letting multiple landlords compete, you could increase the number of incentives you’re offered to move. | If the fit-out takes longer than expected, managing multiple negotiations simultaneously can lead to decision fatigue and a potentially expensive temporary relocation if your former lease expires. |
CALL OUT:
Expert help to navigate your new fit-out or retrofitting project
A dedicated project manager can provide invaluable guidance, leveraging data and market intelligence to tailor advice to your specific situation. From lease negotiations and space planning to the timely and cost-conscious completion of fit-out projects, their expertise can help simplify any complexities.
Critical considerations for your fit-out
After two years of sharp cost increases, the average construction cost has risen by 5.6% this year. One of the reasons for this is the steady cost of materials, which helps maintain budget consistency. Tenant-related expenses, including technological enhancements, specialised AV requirements, and specific design elements, have remained stable year-on-year. Similarly, spending on AV and IT has remained stable, aligning with the emphasis on technology for remote and hybrid work. It’s important to carefully plan for these costs to avoid any unexpected financial surprises.
In this process, the role of experienced project managers and commercial real estate professionals is crucial. Project managers ensure that everything stays on track and within budget, while real estate experts provide market insights, assist with lease negotiations, and help identify strategic locations for your team.
Organisations can manage their office fit-out projects more effectively by considering these factors and seeking expert advice. This approach helps make informed decisions and lays the groundwork for a successful workplace environment.
*Source JLL Australia Fit-Out Cost Guide 2023/2024
