Imagine this: you’ve just walked out of an office viewing and found your dream office. The postcode is great, you’re close to clients, and the space is well-connected to transport links.
The only issue is the price tag… Or is it?
Negotiating can be daunting, but it’s an integral part of business and has been for thousands of years. There’s always room to negotiate the price of your new office.
To help you approach this with confidence, we’ve created a short guide on negotiating the best deal for your new office, all with the expertise of Hubble’s Tenant Advisors
- What factors play into the cost of an office?
- What factors influence negotiations?
- What things are easy or hard to bargain?
- What are the do’s and don’ts of negotiating?
What factors play into the cost of an office?
Office rent is the second-largest business expenditure after salaries.
Multiple factors can influence this, such as size, service charges, business rates, alterations costs, access controls for larger teams, and WiFi and furniture (if not included). The main ones to be aware of are:
1) Office type
The type of office you choose will have an impact on costs. For example, you’ll pay a slight premium on serviced office rent for flexibility, all-inclusive fees, and no fit-out costs.
Meanwhile, managed offices have lower initial costs but can become more expensive over time due to added premiums for flexibility, management, and custom fit-outs.
2) Amenities
Make sure to also consider the amenities the office space provides. Does it have 24-hour access? A gym? Free beer? Do you have to pay extra for meeting rooms or can you book them for free and at will?
The cost of such amenities may seem small upfront, but over time, they do add up so it’s worth adding this as a factor in your negotiations.
Sometimes, private office providers may not be so keen on making significant rental price reductions but are happy to provide benefits instead.
You can filter your office search on our platform, by selecting all the amenities you require.
3) Location
The cost of office rental will vary widely depending on the area and your budget. Let’s take London for example.
In East London — Old Street, Shoreditch, and Stratford — the average cost per desk ranges from £210-£800 per month. Meanwhile, in the West End, the average cost is £350-£1150 per desk per month.
What factors influence negotiations?
So, we’ve covered the factors that play into the cost of an office. Now, let’s go through what influences negotiations.
1) Circumstances
When negotiating your contract, certain circumstances may be in your favour. For example, let’s say the office has been on the market for some time. In this case, it’s more likely that the office provider will accept a lower bid.
Hubble Top Tip: Make sure to ask either your office provider or Tenant Advisor for such details.
2) Length of contract
The length of your contract also plays a role when negotiating rental prices. In general, signing a longer licence will increase your chance of securing a discount.
Hubble Top Tip: Ask the office provider for price proposals based on 3, 6, 13, and 24 months.
You can then use this information and compare it against your perceived team growth within the given periods of time.
3) Office size
The size of the office, square feet or desk numbers, will also play a crucial role in securing a discount. For example, the larger the office, the more leverage you will have when negotiating rates.
Hubble Top Tip: If you plan to stay long-term and have a large or growing team, booking a larger flexible office for an extended period can save on overall costs.
What things are easy to bargain on?
For us at Hubble, rent is the main negotiation point. “If build works are required, this is another element that can be bargained on and included in the overall package”, says Henry Yiend, Senior Workspace Provider at Hubble.
“Length of term is also a bargaining tool”, says Henry. “Serviced sweet spot 1-2 year whereas managed is 2-5 years.”
There’s also the start date to consider. The sooner, the better. “If there is a long void before moving in, the host/landlord will be less inclined to discount as they may prefer to wait for a party that can move in sooner”, says Henry. “If you’re too early, they won’t even consider an offer.”
You should also consider how long it takes you to sign a contract. “Hosts love it when you’re committed and are motivated to do the deal”, says Henry. So be sure to keep that in mind!
What are the Dos and Don’ts of negotiating?
Understanding the dos and don’ts of negotiating can help you secure the best possible terms for your office space, helping you to make informed decisions and avoid common pitfalls. These include:
Do: Know your parameters
Before you go into negotiations, it’s important to know your parameters.
These include having budget and a well-outlined timeline so you have a clear plan for the search and can negotiate from a stable foundation. This makes the whole process way cleaner.
Do: Keep your cards close to your chest
Avoid revealing too much when negotiating. Keeping the hosts guessing can give you more leverage, as they won’t know your limits or urgency, allowing you to secure better terms.
Do: Have a shortlist of choices
It’s important to educate yourself on the market and create a shortlist of choices.
Our expert advisors recommend viewing at least four offices before making a decision. This is advised to ensure that you not only find the perfect office to grow your business in but also that you have a better likelihood of securing a reduction in rates.
The best way to do this is to work with an agent or broker who has built relationships within the office sector.
Hubble, for example, has a dedicated team of Tenant Advisors who will send office recommendations, attend viewings, provide support and guidance, and, most importantly, help negotiate rental fees.
The best way to create a shortlist of offices is to browse London’s largest online inventory of flexible office space.
Don’t: Put yourself under time pressure
Make sure you don’t put yourself under time pressure by serving notice on your existing space. Instead, use a third party to negotiate on your behalf to secure the best deal without the rush.
Don’t: Feel the pressure to do it all by yourself
Seek advice from professionals, such as real estate agents or consultants, who can provide valuable insights and assist with negotiations.
How Hubble can help
Our flexible workspace platform features 22,000 offices across over 1800 buildings in the UK, so you’re bound to find one that suits your preferences and needs.
With over 25 years of combined experience, our team of experts places a business in a new office every 2.5 hours. During your search, they’ll send you recommendations, organise and attend viewings, and secure you a discount up to 15% — completely free of charge!
Why opt for Hubble?
- Expert Guidance – Our workspace specialists oversee the entire process of finding your new office, so you don’t have to.
- 100% Market Coverage – Gain access to every available workspace in the flexible office market. Simplify your search by exploring all options in one place.
- Significant Savings – Benefit from average discounts of 15% as our experts negotiate the best prices on your behalf.
- Up-Front Pricing and Information — We don’t hide pricing and details behind sales calls or gatekeepers.
