Rent Commercial Property

Commercial property for rent in London: A brief guide on how to find the perfect office for your business.

What is Commercial Property?

Commercial property includes all buildings utilised for the purpose of carrying out a business or “commercial” function. The five main categories are offices, retail/restaurant, industrial, leisure and healthcare. Essentially all buildings that are not residential dwellings fall under the umbrella of commercial property. However, as with many aspects of the sector, commercial property is not quite that straightforward.

Local authorities define exactly what a building may be used for in accordance with the Town and Country (Use Classes) Order 1987. As such, nearly all buildings fall under one, or a number of, the below “Use Classes.”

Use Class

Description

Includes

A1
Shop & Retail Outlets
  • Shops
  • Retail warehouses
  • Hairdressers
  • Travel & ticket agencies
  • Post offices
  • Pet shops
  • Sandwich bars
  • Showrooms
  • Domestic hire shops
  • Dry cleaners
  • Funeral directors & undertakers
  • Internet cafes.
A2
Professional Services
  • Banks
  • Building Societies
  • Estate Agents
  • Betting Shops
  • Employment Agencies
A3
Food & Drinks
  • Restaurants
  • Snack Bars
  • Cafes
A4
Drinking Establishments
  • Public Houses
  • Wine Bars
A5
Hot Food Takeaways


B1
Business
  • Offices
  • Laboratories
  • Studios
  • Light Industrial
B2
General Industrial
  • Industrial Units
B8
Storage & Distribution Centres


C1
Hotels
  • Hotels
  • Boarding
  • Guest Houses
C2
Residential Institutions
  • Hospitals
  • Nursing Homes
  • Residential School
  • Training Centres
C3
Dwellinghouses
  • Individual and family homes
C4
Houses in Multiple Occupation
  • Apartment buildings
D1
Non-residential institutions
  • Medical & health centres
  • Crèche
  • Nursery
  • Museums
  • Public Halls
  • Libraries
  • Art Galleries
  • Exhibition halls
  • Education and training centres
  • Places of Worship
  • Law Courts
D2
Assembly and Leisure
  • Cinemas
  • Concert Halls
  • Skating rinks
  • Gyms
  • Bingo Halls
  • Other indoor and outdoor sports and leisure uses not including vehicles
Sue Generis
Anything that doesn't fall into the above
  • Petrol stations
  • Amusement arcades
  • Launderettes
  • Car showrooms
  • Nightclubs
  • Casinos
  • Theatres
  • Hostels
  • Builders Yards
  • Scrap Yards


If you are interested in renting commercial property please contact our tenant advisory team at +44 20 3608 0215 or email enquiries@hubblehq.com for free advice on finding the perfect office for your business.

What type of commercial property can you find using Hubble?

Offices (B1). We are an online marketplace for office space in all its different forms.

This means you can find Leased (including Sub-leases & Assignments), Serviced and Private offices on our site along with Fixed desks, Hot Desks and Co-working space.

Whether you are a large organisation looking for a new headquarters or a freelancer seeking an individual desk, we are able to help you find the perfect office for your business.

Want to learn more about commercial property? Pop your details in the form below and one of our expert advisors will get back to you in minutes.

What are the different types of offices?

Office Type

Serviced

Leased


  • Private offices
  • Fixed desks
  • Hot desks
  • Co-working
  • New leases direct from a landlord
  • Sub-leases
  • Assignments

Typical length of term

  • 3 months - 1 year +
  • 5 – 10 years
  • 10 years with a break option at the end of year 5
  • 5 years with a break option at the end of year 3
  • Possibility for shorter-term lease via a sub-lease or assignment or negotiation


  • Flexible/Short term licence agreements Typically all inclusive “Plug and play” aka Ready for immediate occupationFitted out/FurnishedLower set up costs Short transactions times
  • Longer term
  • Cost Effective
  • “Your own space.” Branded and fitted to suit each individual tenant’s requirements.
  • New leases typically require a tenant to fit out the office
  • Sub-leases/assignments usually allow a tenant to inherit a fit out
  • Less transparent, more complex contracts
  • Longer transaction time. Typically need 3 – 6 months. Can be up to 12 months.


How do I know what the correct type of office for my company is?

Serviced offices

The correct type of office for your company is largely dictated by stability. Whether you are a young, growing business that cannot predict where you are going to be in the next few years, expanding into a new market, or a large corporation in need of additional office space for a project team, serviced offices are likely to be appropriate.

Serviced offices allow for straightforward, short-term contracts of between 3 months to 1 year with minimal set up costs. Most serviced offices come fully furnished with meeting rooms, kitchens, break out areas, and internet in place. All you need to do is bring your computers and you’re good to go.

Additional benefits of serviced offices include:

  • Flexibility. Allowing a company to scale up and down within a building.
  • Short transaction times. Subject to availability, it is possible to identify an office, view the property, sign the contract and be in occupation within a 2 - 4 week period, ensuring no downtime.
  • Simplicity. All of your outgoings will be wrapped into one invoice at the end of each month and you pay for exactly what you use in relation to desk space, meeting rooms and printing facilities.
  • Facilities. Nearly all serviced offices offer a staffed and secure reception, plenty of meeting rooms, and large break out areas with kitchen facilities, creating a vibrant working environment.
  • Infrastructure. The larger serviced providers with multiple properties typically allow a tenant access to their offices across the globe providing a base for overseas business trips, a pit stop between meetings, and the ability to try out new markets.
  • Brokerage fees. No need to pay acquisition fees with straightforward contracts and all-inclusive rates. Using the Hubble platform will help you secure the best terms completely free of charge.

For more information on Serviced Offices, please read: https://hubblehq.com/serviced-offices

Sub-leases/Assignments

Also referred to as “Grey space,” tenant space, or second-hand accommodation.

Sub-leases and assignments suit businesses in need of their own private office space on a short, flexible lease usually for a term of up to 3 years.

Sub-lease

A sub-lease is offered when a tenant in possession of a lease direct with the landlord decides they want to dispose of part or the whole of their office. A sub-lease is formed via separate legal document between the existing tenant (sub-lessor) and incoming business (sub-lessee) called a Licence to Underlet.

Sub-leases are beneficial for occupiers who wish to reduce their property overheads, and for growing businesses that acquire more space than initially needed.

The benefits for an incoming tenant (sub-lessee) are as follows:

  • Little to no Capital Expenditure (CAPEX). Many offices available via a sub-lease will come fully fitted and furnished meaning the set-up costs are far cheaper in comparison to a conventional lease.
  • Cost effective. Rather than paying per desk, the rent is calculated on a rate per square foot, typically marketed as £X per sq ft per annum. Meaning you can add extra desks to your space without your rent going up.
  • Less Expensive. In a rising market, sub-leases are less expensive than a lease direct from the landlord.
  • Less security required. For young companies or new entities, a landlord will typically require a tenant to provide a 3 – 12 month rental deposit depending on the length of the lease and the tenant’s financials. With sub-leases, landlords tend to be more flexible and a tenant can get away with tying down less capital.
  • Your Own Space. A tenant can brand and decorate the space as they wish providing they return the office to the condition in which it was found at the beginning of the contract.
  • Not all office accommodation offered by way of a sub-lease is fitted out/furnished
  • Where there is an existing fit out in place, it is likely to require some tweaking to suit your exact requirements in terms of the number of desks, meeting rooms etc.
  • Not all-inclusive. Other than the rent, service charge and building insurance, which are paid to the landlord or their property managers directly, Business Rates, Utilities, Contents Insurance, Internet etc. are all paid separately.
  • Existing tenant default. If the sub-lessor (existing tenant) defaults the sub-lessee’s (tenant in occupation) lease could be affected. It is important to check the financial covenant of the sub-lessor prior to taking on their space. Clauses may also be added to the contact to better protect the incoming tenant’s position.
  • Condition & Reinstatement provisions. It is important to document the condition of the property at the commencement of the lease as both the tenant and sub-tenant will be responsible for returning the premises to the condition in which they found them.
  • Legal advice is recommended. It is important to have a real estate lawyer check the terms of the contract to ensure your interests and position is properly covered.
  • Landlord’s consent. Prior to sub-letting an office, the majority of leases require the existing tenant to ascertain landlord’s consent.

However, there are some important considerations to bear in mind when sub-leasing:

Assignments

An assignment is proposed when an existing tenant (assignor) decides they wish to dispose of their entire lease. Put simply an assignment is the transfer of a lease from one party to another party in which the incoming tenant (assignee) takes on assignor’s contractual liability with the landlord. An assignment is documented via a Licence to Assign.

The benefits of taking an assignment are much the same as with a sub-lease in terms of limited to no CAPEX, it’s cost effective, less expensive, and your own space.

However, there are some additional benefits of assignments listed below:

  • Reduced Transaction time. As the terms of an assignment largely mirror that of the original lease, the transaction time tends to be shorter than taking a sub-lease or lease.
  • Less Expensive. Unlike a sub-lease where the rent reflects the market rate at that point in time, a tenant taking an assignment can inherit the rent paid under the original lease which will reflect the market rent from the last lease event (commencement, rent review or a lease renewal). In a rising market, this means an incoming tenant can make significant cost savings.

Similarly to a sub-lease, an assignment is not all-inclusive, the existing fit out is likely to require some alterations, it is important to document the condition at the beginning of the lease, landlord’s consent must be received prior to the completion of the transaction, and legal advice should be sought.

Leased

Often referred to as conventional space, leased offices are suitable for organisations that can project what their headcount and financial position will be over the next 5 years.

The majority of landlords in the UK will require a tenant to take a minimum of a 5-year lease, sometimes with a tenant break option at the end of the third year of the term.

The initial set up cost of a leased office is far greater than that required by a serviced office, sub-lease or assignment primarily because the tenant will be required to fit out, furnish, decorate and cable the office themselves.

However, once fitted out and furnished, these offices prove more cost effective than the many serviced and flexible office solutions as the tenant receives rent free packages, which increase if the tenant commits to a longer lease, to offset the impact of the initial upfront costs. These costs can then be amortised over the length of the lease to provide a tenant with their own, bespoke, cost effective office space over which they have a large amount of control.

For further information on Leased Offices, please read: https://hubblehq.com/leased-offices

How much office space do I need?

Serviced Officesyou simply need to work out how many desks you need. Most providers will then grant a tenant around 40 sq ft per person for desk space whilst 60% of the building will consist of communal/shared facilities (including meeting rooms, break out areas etc.)

Leased Offices - most office buildings in the UK are designed to an occupancy ratio of 1:10 meaning 1 person per 10 sq m which roughly translates to 100 sq ft per person. This is calculated relative to the supply of air conditioning and heating to the building as well as the number of toilets to ensure system is not overloaded. However, it is possible to occupy leased space more densely than this, especially if you bolster the supply of toilets and air conditioning to the office unit. It is important to ensure you comply with Building Regulations.

For further information on how much space to rent, please read: https://hubblehq.com/blog/how-much-office-space-do-i-need

How do I budget for my office move?

This depends on whether you are interested in renting a serviced office or a leased office.

With serviced offices, you need to define how many desks you need and your search area. Once finalised, please use the Hubble Search Page for further insight into the cost of the different markets/sub-markets we cover and for more information on availability. We advise you read the comments for each property as they are not all directly comparable in terms of what is included in the quoting price. It is also important to remember that most serviced office providers require a tenant to pay a deposit of 1 - 2 months’ rent.

Leased offices (including sub-lets/assignments) are more complicated as the tenant is required to pay the following in the majority of cases:

  • Rent
  • Business Rates
  • Service Charge
  • Utilities
  • Insurance (Building & Contents)
  • Fit Out & Furnishing (including installation of partition, cabling, kitchen and break out areas etc)
  • Maintenance
  • Stamp Duty
  • Legal Fees
  • Rental Deposit
  • VAT
  • Dilapidations/Reinstatement Works
  • Other landlord costs

Some of these costs are offset by incentives such as rent free granted at the beginning of the lease. However, it can be difficult to estimate exactly what these costs are going to be.

For further information on budgeting for a leased office acquisition, please read: https://hubblehq.com/leased-offices

If you are interested in renting commercial property please contact our tenant advisory team at +44 20 3608 0215 or email enquiries@hubblehq.com for free advice on finding the perfect office for your business.


How long does it take to move office?

This varies with the type of office you take.

Serviced offices - allow 3 weeks to 3 months.

Supply is relatively liquid with serviced offices and once a site has been identified, the terms and contract can be agreed and executed within a week. Providing the unit is empty and in a satisfactory condition, moving in can take as little as 24 hours. To ensure comfort, we advise you commence your search 3 months prior to the intended move date or existing contract expiry.

Leased offices (including Sub-leases & Assignments) - typically 3 - 6 months. 6 - 12 months for requirements over 20,000 sq ft.

Identifying an office takes slightly longer as availability is less transparent, and the transactions are more complex. As such, we advise you speak to one of our tenant experts beforehand and seek legal advice from real estate lawyer beforehand.

Need help finding office space?


Contact our tenant advisory team at +44 20 3608 0215 or email enquiries@hubblehq.com and we'd be happy to help.

To browse the largest inventory of office space in London, click the link below.

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