Office for Rent Strategies
JAN 2022 | LAST UPDATED
6 EASY STEPS TO 10X YOUR RENTAL SAVINGS
100 MILLION+ SQ FT OFFICE FOR RENT HONG KONG
OFFICE SPACE IS ONE OF THE SINGLE LARGEST BUSINESS COST
How can tenants can gain a real advantage with Hong Kong office rents? In this guide we cover 6 key areas that will generate up to 90% of the achievable office leasing savings.
The most common barriers businesses face is in the inefficient process of finding the ideal office for rent to match their exact needs. Once the ideal solution is found, the question then becomes how to secure the best market deal or how to ensure the correct negotiation strategy is implemented? Mistakes along the way can make or break a deal and lead to both time and money being wasted.
HOW THE TRADITIONAL MODEL WORKS?
Most office lease events in Hong Kong only occur once every 3 years, finding and negotiating an office lease can be complex for both business representatives with or without hands on experience in the lease renewal or relocation process.
Traditionally, businesses will engage with multiple office agents (JLL, CBRE, Savills, Cushman, Colliers, Knight Frank) or browse online through office listing sites (i.e. Prime Office, Hong Kong Offices, Spacious) for offices for rent.
While convenient and serving most markets around the world, traditional agency methods lack data driven and opportunistic market coverage, while online office listing sites provide open market vacancies but lack institutional grade expertise on executing complex lease negotiations.
DATA & INSTITUTIONAL GRADE EXPERTISE
The simply answer to the solution for the traditional model is to utilise data, technology and institutional grade expertise to provide impartial and customised solutions for businesses.
Armed with information and negotiation experts, you’ll be well on your way to put an effective office leasing strategy in place that benefits your business and bottom line with significant infrastructure savings highlighted in the chart below.
Lets dig in to our top 6 areas.
OFFICE INFRASTRUCTURE SAVINGS (3,000 SQ FT) *
*HK$3.75MM DISCOUNT POTENTIAL SAVINGS
1. FULL OFFICE COVERAGE
In all office markets around the world, tenants are limited to ‘current’ market availabilities or vacancies.
In Hong Kong, the available Grade A office market in the Central business district for rent currently represents approx. 6% of the total stock. The remaining and hidden 94% are occupied by tenants with lease events coming up within 3 year cycles. What if tenants could access this hidden 94% office stock?
At SAVVI, we call this shadow stock. Coverage of off-market and upcoming opportunities provide more market fluidity by allowing tenants to monitor opportunities that may be coming available within the transaction window which would not show up on any standard vacancy listing. The breadth of options facilitate demand and supply, whilst minimising bidding wars in tight markets through private match making.
2. LEVERAGE NEGOTIATION EXPERTS
Whether your business is a large MNC with a team of regional in-house corporate real estate experts or a start-up with the office manager or Director leading your real estate project, the number one problem for all businesses, big or small, is in making informed decisions in an office market which lacks transparency or flexibility.
The key is to take a strategic approach to handling negotiations, particularly when dealing with your existing or new landlord, no matter how big or small the office requirement.
Without the correct approach on the negotiation and execution of a lease, the tenant loses significant value, not just monetary but also time, flexibility and longer term lease security for the business.
3. OFFICE INTERIOR COST SAVINGS
Finding and moving into a fitted commercial office for rent can immediately save HK$millions on fit-out for businesses.
An office fit-out includes designing, constructing, and furnishing the physical workplace. Costs are typically quoted and assessed on the net square footage of the space and for Class A or Prime buildings normally range from HK$600 - 1,200 per sf Net.
Explore the most suitable options by registering your interest or providing feedback to fine tune your evolving office requirements with our dedicated fitted office match-making algorithms.
4. MITIGATE REINSTATEMENT COST
The lease agreement generally requires tenants to restore the property to its original handover condition, before the expiration of the tenancy at their own cost.
Reinstatement costs for Grade A or Prime buildings normally range from HKD 150–300 per square foot net.
Through listing your company's office space early with SAVVI, you have access to thousands of prospective tenant's who may take over your office space in 'as is' condition, saving them both design & fit out costs, and releasing you from your reinstatement liabilities.
For a 3,000 sq ft net office, this translates to an average of HKD 450,000 in reinstatement savings.
5. LEVERAGE TENANTS NETWORK
By joining the Tenants Network, you can ensure that your business is presented with the ideal office for rent through institutional grade expertise and a single point of contact to support your business, throughout your entire business life cycle.
Fundamentally, harnessing optionality, time and strategic planning is ultimately what will separate businesses in achieving high alpha on their real estate.
Register your office brief and receive real-time alerts delivered straight to your inbox within your transaction window or lease event.
Your dedicated account manager will be in touch to provide you with on-going market coverage and real-time market intelligence so that you and your team can sit back, relax and focus on your core business!
6. JOIN CROWDSOURCED OFFICES
We all know the concept of economies of scale. Bulk purchases typically equate to lower prices, the larger the order. The same goes with landlords who are pre-leasing or marketing their vacancy.
Through SAVVI’s exclusive tenant office crowdsourcing platform, tenants can leverage the power of our proprietary Tenants Network to structure and secure the lowest and most favourable leasing terms that would otherwise not be possible with a single lease transaction.
NOT YET REQUIRE ANY RENTAL SERVICE?
SAVVI delivers scalable custom office space for rent for businesses big and small.
Prefer a discussion over the phone? Speak directly with our account managers today, simply email us by clicking here, and we will be in touch same day for a call.