An office is a tangible representation of a company’s culture, ethos, and vision and a home to its achievements, ideas, and aspirations. Even in the constantly evolving business landscape, with remote and hybrid working models becoming more prominent, the need for physical office space cannot be diminished. Having an office space is a strategic choice based on business needs, one that favors its image and ability to attract top talent and create a structured environment conducive to productivity.
This makes an office space a hub for innovation, collaboration, and connection, collectively driving a business forward.
To lease an office space in the commercial real estate market in India, there are a lot of considerations, with factors that range from daily business operations to location accessibility. Let’s understand how we can go about leasing an office space.
How to Lease an Office Space in India
Step 1: Assess Your Business Needs and Your Budget
Once you’ve decided that you need an office space, you should ask yourself the following questions and then make your initial inquiry.
- What are your business requirements?
Outline the required space, office layout, and location preferences as per your business model. In this, you must reflect on your current and anticipated needs to accommodate growth and potential shifts in your business operations. For instance, a tech company will require space for servers and adequate infrastructure. Similarly, a welcoming reception area may be important if you frequently host clients.
- What is your budget?
Fix your budget by planning for all expenses related to leasing a property. This includes utility, maintenance, office supply, and other overhead costs, in addition to rent. Also factor in renovation and technology infrastructure investments.
Step 2: Choose the Right Location
The location of your office is a critical consideration. Even the most exceptional space can only be rendered effective in an accessible area. An inaccessible space would be a waste of space and a major financial oversight.
An office location can significantly influence operational efficiency, brand visibility, and ease of access for clients and employees. When assessing available properties and spaces, consider factors such as proximity to suppliers, employee and client demographics, and public transportation.
For instance, in Mumbai, having an office or coworking space in Downton Powai, Bandra Kurla Complex, or Andheri would be ideal.
Step 3: Find and Evaluate Potential Properties
Once you have a budget and have decided on the appropriate location, you can start looking for the right property. To get proper guidance in this regard, you can enlist the help of a broker or agent. When you find potential property options, you can arrange an in-person visit to check if they meet your expectations.
Taking a property tour will help you assess the suitability of each space for your operations. Consider the physical condition, layout, potential for customization, security features, and amenities. Ensure the environment aligns with your brand, facilitates a productive workflow, and enhances your business operations. Consider how the space connects with your clients, employees, and business partners. This is where you pay close attention to the amenities in the space. Do they have a properly functioning lift? Or a gym. Are there enough open spaces on campus? Does the property meet the functional requirements of the employees, like daycare, grocery shopping spaces, etc.?
Across India, various prime office properties come equipped with excellent amenities and connectivity alongside campus enhancements that add to their accessibility.
Notable properties like Bangalore’s Golf Links Business Park, Gurugram’s World Mark in Sector 65, and Mumbai’s Peninsula Business Park provide extensive amenities to meet tenant needs. These sites offer the right mix of functionality and services for businesses seeking optimal operation and employee well-being.
Step 4: Negotiate Lease Terms
Having understood property offerings, we can adequately discuss and negotiate the lease terms, costs, and other conditions with the landlord or leasing company. This negotiation will cover everything from the rent amount to the lease duration, renewal options, and any improvements or customizations you may require.
It is crucial to enter into negotiations informed. Discuss and clarify terms, including but not limited to the length of the lease, monthly rent, escalation clauses, maintenance responsibilities, sublease policies, and renovation permissions. Make sure to negotiate terms that offer flexibility and security to your business. You should aim for leasing terms that provide some level of flexibility for your company’s future growth and possible changes.
Before signing the lease, it’s essential to have it reviewed thoroughly, preferably by a real estate lawyer. Pay special attention to clauses regarding lease termination, maintenance obligations, rent increases, and subletting options, as these aspects protect your business interests.
Step 5: Prepare to Move into the Space
Create a moving plan that minimizes disruption to your operations and swiftly begins operations in the new office space. Setups like a proper internet connection and infrastructural elements like meeting rooms with good connectivity, functional washrooms, etc., should be prioritized to get things going as soon as possible.
Things to Consider in the Commercial Real Estate Leasing Process
- Lease Agreements and Legal Documents
Understand standard lease terms like lock-in periods, security deposits, and rent escalation clauses, and ensure that you register the lease under the Registration Act of 1908.
- Legal Assistance
It is advisable to seek legal help and counseling to make things a little hassle-free. They will help you understand lease agreements, zoning laws, and compliance issues much easier.
- Hidden Costs
While rent may be a crucial consideration, other costs such as maintenance charges, utilities, property taxes, interior design, furnishing, and other customizations required for the office space should also be considered.
- Financial Due Diligence
You must understand which portions of leasing and maintenance costs are deductible under Indian tax laws. Also, there should be a detailed discussion on how GST applies to commercial leases and its impact on overall costs.
The commercial real estate leasing process is complex, but by giving it some structure, you can better align this strategic move to your business goals. An office does not have just to be a dull room with four walls to work within. The right office space can profoundly impact employee well-being and help a company scale up and succeed in a competitive landscape while propelling it toward its goals.