After your help again gang.

I’m visiting 4 start up units on Friday and was thinking ahead as in what important questions to ask the Agent whilst i’m walking round as I know I will be on the phone to him about 10 minutes after he’s left!

Thanks again in advance 🙂

Smudge

do you mean commercial property?

Hi Stoner,

I’m looking at 4 Business ‘Start up units’ ranging from 450-800 SQ FT.
Theres only one months notice required to vacate, so should I need a larger one sooner than I thought I dont have any long term lease hassle.

The starter units have concrete floors, loading access, fluorescent strip lighting and three phase power. One has a small office which will be ideal.

Contract terms
Double check that notice period and what exactly that entails. A modest investment in a good solicitor would be worth it.
Insurance specifics i.e. what do they demand you have
Avergae utility bills
rates ?
Water meters ?
Access ?
Neighbours ?
Shoudl cover it. How is your business structured and what advantages can you gain from tax writeoffs/writedowns for business related expenses such as rent, power, insurance etc. Remember – all of this is straight off your bottom line.

I would also be asking about incentives such as rent free periods. Everyone else is, couple of months at least.

Depending on where you are you could really be in the driving seat re rent – look to see around if there are many other empty units etc, if there are then this is of course in your favour. If you have a surveyor ask them to find out what rent precedents have been set lately – in many areas they have dropped significantly. For example where I am warehousing dropped from around 10 per sq ft to 3.50 at one point and is now around 7.
At a minimum I would be asking for:
– rent free period
– tenant only breaks, perhaps as short as 6 months, definitely at 12 months
How far you get will depend on the demand in your area. In terms of the right rent to pay of course your surveyor is your friend here.
Operational considerations depend on your business and many have been mentioned above, only you know what you need but consider all above. Working hours is an important one – 24hrs is good if you need it or envisage needing it in future.
Re rates a good surveyor may also be able to reduce the rateable value (based on fall in rents) for you thus saving rates. In any case you can just phone the local council business rates dept and ask what the current rates are.
HTH.
ps. what business are you in?

in terms of incentives I wouldnt bother – as you say you’re on one month rolling tenancy so break options and rent free’s mean squat.

If service charge is raised seperately, then ask to see the s/c budget for the estate for the coming year.

As above, check notice obligations – how to serve, to whom, by when.

If there’s a lot of vacant units on the estate then push on the rent a bit as you will be saving the landlord rates leakage.

Are utility costs (power specifically) charged straight through to you, or does it come via a metered service charge, recharged from the landlord (i.e. liabile to a markup). How much juice will you be using, big 3phase motors or just lights and 240v sockets> If the latter then dont sweat it.

The most important bit is already done with the start up unit philosophy on term length. One month rolling is ideal. The rest is just cash flow and in the scheme of things is rarely a huge relative cost if your business is viable in the first place.

Thanks for the excellent advice as ever.
Going to write the comments down and compose a folder for each unit with pictures to recall the insides.

Damo,
I am setting up my own company to supply Li-Ion, Li-Polymer & NiMH batteries to the OEM Market. I need a small unit initially for small stock levels and an assembly line, a Small office would also be preferable.
My Supplier in the Far East has been impressed with my sales within the Bike Light market (Thanks everyone on here who has made this so) and is keen for me to become their UK agent supplying to the OEM market as well.
Large volume stock would be shipped direct to the customer, hence me only wanting a small unit to start with.
So, just a little plug on my behalf, anyone in the OEM market requiring battery advice for a new or replacement battery please send me an email.

Smudge

Some subtle differences can make quite a difference to what you actually pay in total.

(1) Rates – who pays. You may be eligible for Small Business Relief and so pay less or even none.

(2) Waste collection charges (i.e. your bins) – but you will also presumably have hazardous waste (if you plan to store this outside is their space for the bin etc)

(3) Telephones. If things are going well you could end up with multiple lines, if you install these you not only get connection charges but also usually a 12 month contract. If things grow quick this is a pain when you move out. Some units will be on a “serviced” basis where you pay for phones on a per month or per usage basis.

(4) Broadband. Its almost essential for any business. The same issues apply as for phones.

(5) Service charges. Avoid if possible. If there are make sure you know whats covered – e.g. cleaning, window cleaning, etc

(6) Security. Alarms, patrols, access etc can affect insurance premiums if you have high values of stock.

(7) Who fixes everything when problems happen? Can you afford to spend a day every few months chasing a plumber / sparky / BT etc (in a bare shell unit, you’ll be responsible and I recon spend 1 week over the year running round after utilities and tradesmen!)

I’ve found that a reasonable serviced office is often actually cheaper than a bare shell that you then have to invest in kitting out with flooring, desks, phones etc. It may not suit your particular operation though.

If you really think you’ll grow then a clever move is to try to get a unit that would let you simply expand “next door” (or e.g. add a warehouse/larger office a few doors down) – because moving office is a PITA and will waste weeks of your time – so try to suss out where there might be expansion opportunities (may not be empty now, but the tennent might be thinking of moving).

Legal advice is important – but if it is definitely a 1 month break option its probably a “standard form” contract that they won’t vary (because their legal costs won’t be worth it if you quit after a month). Surveyors can be useful – but they don’t come cheap, and may not really make much difference on a short term let. Anyone telling you about rent free periods – probably has no understanding of the sort of short term lease you are trying to negotiate!

Get some informal references from existing tennents too – whats the landlord like (don’t assume e.g. that a council / local authority will actually be good to deal with).