Understanding the true cost of commercial property can be complex. To ensure the success of an office move or re-location, business owners must source and consider information on costs from a multitude of sources, both external and from within their own organisations.
While some expenses such as rent, rates, facilities management (FM), IT & telephony infrastructure, dilapidation and legal fees can be readily identified, others are more elusive.
According to property consultants Actium Consult, the headline figure of rent represents just 35 per cent of total office expenditure – and it is those hidden or forgotten costs that have the potential to create a long-term drain on an organisation’s future finances.
Unfortunately, many of these figures are difficult to obtain, or simply unknown. Here are just a few of the office costs that business owners rarely take into account:
- The cost of overruns, and delays including the “opportunity cost” of missed market opportunities
- Management time of senior executives
- Legal costs associated with the lease
- Maintenance contracts – building, plant and machinery, ground maintenance, day to day (for example carpet cleaning), technology hardware
- The cost of unused space once the operation is up and running
- Future upgrades – upsizing, downsizing
- Legislation changes, health and safety regulations, technology advances
- Cost of getting things wrong – such as employee numbers, business forecasts, installing the wrong equipment
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