Successful team collaborations take place in a private office with a focused environment. That is why deciding on the right workspace is important, as it can impact your business operation. Thorough attention to the lease agreement is vital to help you make informed decisions and directions about your business.
With the continuous economic and market changes, more businesses seek flexible lease terms to adapt. In this blog, we will explore the importance of carefully examining lease terms of office spaces for rent in Manila and understand how flexible lease agreements can bring advantages to your business.
Understanding Key Lease Terms: What You Should Know
Lease agreements are legally binding and must be written with clarity. It consists of the terms and conditions of both the tenant and the landlord. Below, we will break down the most common and important lease terms you need to look out for.
● Rent: Paying rent is the primary responsibility of leasing, and that is why it is always the first thing business owners consider. It is indicated in the lease contract if the payment shall be made monthly, quarterly, or annually. The property’s location, condition, and size are the top factors influencing the rental rates.
● Lease term: Duration is stated in the lease agreements to specify the length of the lease is valid. Long-term or short-term leases are available options that you can choose from based on your business goals and future ambitions.
● Renewal options: Determining if the lease can be reinstated can help business owners weigh in on their option of remaining in their present office space lease. Renewal options provide both the landlord and the tenant with an opportunity to revisit and improve the terms and conditions modified based on the needs.
● Occupancy: Properties have specified numbers of occupants allowed. Understanding occupancy limits can help you scale your business operations. If you are planning to grow your startup, welcome more staff, or cater to more clients, it’s crucial to ensure that your current office space lease can accommodate these changes.
● Hidden costs: Most of these additional fees, which commonly include maintenance, taxes, and insurance, are not emphasized in the terms and conditions. Sudden charging can negatively affect your budget and your financial planning, which makes it important to clarify these clauses to your landlord before signing.
Effects of Flexibility on Business Growth
Adapting to market changes is not a choice but a necessity. Seizing business opportunities is only possible when a business is skilled enough to be flexible. However, a rigid office space lease contract can restrict your ability to scale up. If a workspace no longer meets your needs, it can get your business stuck in the same place, which can hold back your operation and hinder growth prospects.
Shorter lease periods offer flexibility and a multitude of perks. On top of this is being able to expand your business according to its evolving needs and performance. Not being bound by rigid contracts can give you the freedom to move to ideal office spaces where you can enhance your operations, improve working conditions for your staff, accommodate your client’s needs, or get favorable rent deals.
Reducing Risks Through Lease Negotiations
Negotiating the key terms, we laid out earlier can help you attain flexibility. Below are some tips for negotiating favorable lease terms.
● Be transparent – Talk about your needs, expectations, and budget to your landlord. This way, your landlord can tailor the lease terms to meet your requirements. If you think that the office is worth less than its value, you will have the chance to reassess your decision whether to sign or not.
● Walk through the lease agreement – It would be beneficial to the parties if you could analyze every aspect of the contract together in detail. This is also your opportunity to open negotiations about the rent and ask your questions about the property, the renewal options, and the possible hidden costs.
● Bargain wisely – Landlords can lower rent when they get something valuable in return. Is your business beneficial to the property? Does it cause foot traffic? If your occupancy adds value to the building, you can use it as leverage to negotiate better rent prices. Another way you can bargain is through the utilities. If you are working on a hybrid setup, try negotiating lease terms with your landlord if the parking fee or the maintenance costs can be reduced.
Matching Your Lease Terms to Your Business Needs
With the right preparation, aligning your lease agreements to your company’s trajectory is possible. Begin by assessing your business growth plans in terms of expected employee growth, company expansion, or the possibility of switching to a hybrid setup.
As the team size and operations change, the office space lease may need to be adjusted as well. This is why flexible leasing options are available to help businesses, especially small ones and startups, thrive. Below are some examples of those options.
● Long-term lease: The contract for this type of lease usually lasts a year. Often, renewal options are also offered for a longer duration of stay.
● Short-term lease: This lease allows you to rent for short periods. The rent can be as short as 2 months, depending on the contract.
Choosing Between Long-term vs. Short-term Lease
Both long-term and short-term leases provide benefits to your business. If you are aiming to have stability and want to commit to a consistent address, then a long-term lease is for you. Longtime tenants with excellent records are sometimes rewarded by their landlords with favorable rental rates or incentives. But if you want flexibility, short-term leasing suits you best. Startups and small to medium businesses benefit the most from short-term leases, as they can move things around when faced with internal challenges.
You can determine which lease structure best fits you by planning the future of your business in terms of the scale of operations, workforce, and financial capacity. From there, you can assess which type of lease can help you achieve your future goals and objectives.
When choosing an office space for rent in Manila, consider factors such as location and amenities. One option you can choose from is M Spaces, which offers flexible lease terms. Our private workspaces and meeting rooms are designed to enhance productivity and collaboration. Among our rent inclusions are high-speed Wi-Fi, a spacious pantry, and free printing, scanning, and copying amenities. Located in Ortigas Center, Pasig City, M Spaces provides a prime location for companies seeking convenience and business opportunities in Metro Manila.
Explore our private office options on Facebook and Instagram or contact us directly.
