What are businesses currently paying per sq ft?

A

amgd28

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A couple of years ago, a reasoanable office rent would be quoted at around 40/sq ft. Add in rates, service charges, and the cost of even modest office space, (say 1000-2000 sq ft) racked up.
My business is currently expanding and I am looking at new office space. I am looking at Dundrum and Sandyford and considering spaces between 1000sq ft and 2500 sq ft (more than we need but it would mean we wouldn't need to move again in a year or two).
Typical prices quoted to me are 20/sq ft, with rates adding about 5/sq ft (this is an estimate in some cases) and service charges adding another 3-5/sqft.

While the headline prices have come down over hte last couple of years, I definitely think that there is more value to be had. Typically I get the feeling that a deal could be agreed at 15/sq ft, but the other charges still stand. Other factors that are playing out are that a rent free period will be considered. Also short leases or break clauses inserted into longer leases are a fairly standard measure.

I've been advised that at least one major developer is agreeing deals at 10 sq/ft (although admittedly for bigger square footage), but this is in the city centre.

Anybody have any ideas as to how low they can go in the areas I'm looking at? Anybody any tricks/tips/anecdotes on negotiations on commercial office space in the last couple of months?
 
If precise location is not too important make a short list of about 5 / 6 offices that suit your needs, then ask them for their best price based on the terms your are looking for.

Locations that may suit include above shops in secondary locations. Churchtown business park on beaumont avenue, offices above lidl opposite marlay park, offices beside lepardstown inn or any number of buildings in sandyford ind est.
 
Tips and tricks.
I would mention that you are going to be there long term.
You are looking around at other spaces.
Whatever price you ae given, there will be room to negotiate in it.
Get the landlord to pay rates.
If required get them to fit it out as well, as the landlord, if they are a builder would be able to get it done at a lower price than you as he would have the contacts, labourers etc. You would have to hire somebody to do.
Always get 3 quotes on any work though. Prices can vary greatly.

Let me know if you require anything else
 
Had another look at 5-6 places this week.
Have decided on a space. Right size, and sq footage is quoted as net, not gross, so is actually a big space, reckon will be enough for us for 3 years or so.
Quoting 25/sq ft, not rated yet.
It is already carpeted, but we will need to get the broadband connection brought through to the office suite.
the building is empty right now, and I think if they want to fill the other suites, they need some indication of activity - so they might need the tenancy more than I do.

I'm going to make a proposal of 15/sqft with 5yr lease, break clauses at years 2 and 4.
Reckon they might counter with 18, which I would accept if 6 month rent free period is offered....
 
I'd go for €15 psf on a 5 year FRI lease with a 1 year rent free period and breaks at the end of year 2 & 4. 6 months rent free is fairly standard in commercial leases imho and I'd be looking for more.
 
I know of beautiful office space for rent in Dublin 6...very modern.
Already hooked up for broadband etc.
Beautiful views. Near Luas stop.

Previous tenant still in situ on one floor but has shrunk , hence available space.

pm me if you want details.
 
GreenQueen said:
I'd go for €15 psf on a 5 year FRI lease with a 1 year rent free period and breaks at the end of year 2 & 4. 6 months rent free is fairly standard in commercial leases imho and I'd be looking for more.
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I can't see that working - one year rent free and then up sticks the year after?

Realistically speaking, to get break clauses & rent free periods you would want to be looking at a 10 year lease with a break clause after 4 years. 6 months rent free would be at the max end of the scale for small space.
 
While I understand your point Mcaul, exercising a break option in a lease isn't quite as easy as it's made out to be. If the op were prepared to concede some penalties when the break options are exercised then the landlord would be more prepared to offer a larger rent free period.

There is quite a high vacancy rate for office space in Dublin and the value of having a tenant even with a large rent free period is far more than the value of having an empty office for 7 years or more.
 
Thanks for the feedback. I'm just waiting on clarification on some of the service charges before I bite.
I'd agree that a 1-year rent free period is unrealistic for a 5 year lease, but I sense 6 months rent free is on the table.

The entire block needs to be let, and in that situation the first tenant is a bit of a "loss leader" for the landlord - makes it a hell of a lot easier to secure tenants for the other suites.

Will update with feedback.
 
How about retail space? What are the current going rates for a retail premises? I presume these are a little more expensive than office space?
 
amgd28 said:
I'd agree that a 1-year rent free period is unrealistic for a 5 year lease, but I sense 6 months rent free is on the table.
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Nothing unrealistic in it at all. It is normal practice presently. In Amsterdam where most commercial leases are 5 years, it is common practice in recessionary times to give the first year rent free.
 
Actually made a bid on the original place I wanted at 15 - but I've just come across a place only 100sq ft smaller at a cost of just 12 per sq ft. New build so not rated, think I might go for it. Was originally on market at 36 per sq ft.
 
amgd28 said:
Actually made a bid on the original place I wanted at 15 - but I've just come across a place only 100sq ft smaller at a cost of just 12 per sq ft. New build so not rated, think I might go for it. Was originally on market at 36 per sq ft.
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As long as you know it will eventually be rated and you will be liable from the date you assumed occupancy. The best of luck to you.
 
I have been advised by a number of people that rates are not backdated?
So if it is rated say in January, that rates are payable from then but not liable before then. I can't see how any other system could work as I know of many locations where tenants have been occupied for 2 years , un-rated and subsequently moved out (offices still un-rated) - how could the council realistically expect to recoup previous rates in that instance?

I have also been advised that rate may be appealed, and in this environment can result in substantial saving....
 
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