Am I Qualified to Negotiate a Commercial Property Lease?


Leaders from the PCG team discuss some of the key considerations and insights driving their work.

“This is the question that all tenants need to answer”

When I talk to people about the Sydney property market, they all comment how Sydney has changed in the last 5 years. Not only from a landscape point of view, with high rise developments now the dominating feature of suburbs, but more importantly the affordability crisis affecting both the residential and commercial property markets.  

Every Sydneysider considers themselves an expert when it comes to the residential property market, we all have opinions on where we see value and often negotiate our own residential property agreements. Having negotiated my own residential deal, I know first-hand how different commercial property negotiations are. Commercial deals are very intricate and for ‘young players’, oversights and mistakes can result in costs amounting to hundreds of thousands of dollars over the lease term.

The biggest challenge to most lay people attempting to negotiate directly with their landlords is not only trying to lower the face rents but also ensuring the terms of the lease reflect market and best practice.  Five years ago, the commercial property market was very different, vacancy rates were at an all-time high and we were in a ‘tenant led’ market. Today in eastern seaboard capitals, office markets have shifted well and truly in favour of the lessor. Only when your commercial lease comes up for renewal will you truly realise how scary it is to be a commercial tenant. I have spoken to tenants who have incurred 40% rental increases, simply because they were adamant they could successfully negotiate directly with their landlord, opting out of the benefits provided by:

  • An independent expert with the knowledge to address the full spectrum of costs, and
  • The savings created through creating competitive tension between supply side proponents
  • The linkages between the ‘property’ (lease) and 'place' (workplace) dynamics

The second question you need to pose to yourself is, “Are you willing to take the risk?” The good news is, there are professionals out there to assist you with the intricacies of negotiating a commercial lease. Our organisation offers tenants an end-to-end corporate real estate service inclusive of; tenant advocacy, workplace design and project management services, all three of which are intrinsically linked. We will help structure a new lease and workplace solution to future proof the organisations against the risk of occupying commercial property and guarantee better than market terms and lessor incentives, resulting in financial and operational benefits for your organisation.

If you wish to learn more about the above and how we can assist, reach out to us at: 02 8249 7500.

AuthorSimon Gunnis

Simon founded PCG in 1988. His career has focused on assisting organisations to manage and implement major workplace change projects through the integration of Property, Design and Project Management disciplines. Simon is committed to delivering faster, more creative property and project solutions to PCG’s clients with certainty of time, cost and quality.

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