open space

How much do your offices really cost you?

Eléonore Obala
7 min2019-10-09

In addition to rent and utilities, there are many other expenses to consider in order to accurately measure the cost of your offices. Deskeo helps you to see more clearly to avoid unpleasant surprises and to prepare your next company move.

How much does it really cost to rent an office?

Rent and charges

The first thing you'll look at when renting an office is, quite rightly, the rent (around €500 ex VAT/m2/year in Paris), to which you'll add the charges - around €100/square meter/year. These basic elements that you will find on all real estate ads are far from being the only expenses. They represent only the tip of the iceberg.

Operating costs

To start with, you should allow €100/square meter/year for the running costs of your space (OPEX):

  • electricity,
  • access to running water (if not included in the charges),
  • Internet access (professional fibre with back-up),
  • maintenance of the premises,
  • cleaning service.

The fitting out (CAPEX)

Between the works, the purchase of furniture, decoration and IT equipment, a significant investment (CAPEX) is necessary to fit out your offices in your image. Generally speaking, we're talking about around 500 euros/square meter to be paid in the first year.

These are expenses that will be amortised over time, but which should be budgeted for and, above all, included in the overall cost of your offices. If you stay in your offices for less than 2 years, as is often the case for a growing company, you will easily arrive at more than €250/square meter/year by smoothing out these expenses.

The move

For an office as well as for a flat or a house, the logistics of a move are often underestimated. Call in a professional to help you get organised and make the job easier on the big day. The cost will depend on your activity and the stock you have to move (archives, equipment, etc.).

In any case, take the opportunity to encourage your teams to do a major sorting, which will enable you to start again on a sound basis!

The guarantees

In addition to the investments to be made in the first year to fit out your offices, you should also note that you will have to block several months' rent to "show your credentials".

In tight markets (as is the case in Paris), landlords are in a strong position and impose their own conditions. This is particularly the case for the security deposit, which is often equivalent to 3 to 6 months' rent, plus a GAPD (Guarantee on First Demand). This is a sum blocked in a separate bank account, which secures the landlord in the event of non-payment, and which can amount to 6 to 12 months' rent.

When you add to this the payment of the first three months' rent in advance, as is often the case, you generally end up with more than a year's rent tied up before you even move in...

Difficult-to-predict expenses

The human cost

Do not underestimate the salary costs of managing a workspace. Managing a move, a renovation, the choice of furniture, decoration... All these tasks require specific skills and will make the internal team lose considerable time to consult, compare and choose the various service providers. In addition to the drop in productivity that these new assignments will cause on their usual tasks.

Subsequently, managing the day-to-day operations, maintenance, finding sub-tenants or coordinating multiple service providers... all of this takes time and may even require hiring a full-time person depending on the size of your space.

Finally, it is impossible to forget the stress that such a project represents and the attention that it will require from the management team throughout the duration of your project, which is generally several months.

Prudence also has a cost

If this is not your first office search, you know that such a project is usually extremely time-consuming, energy-consuming and costly... You will have learned from your past mistakes and will opt for larger offices than you need so that you do not have to start looking again in a few months.

You tell yourself that you will have no trouble subletting unused space and that this will save you a move. On paper you're right, but in practice it's rarely that simple.

First of all, you need to check your rental agreement and get explicit permission from the landlord.

Also, finding a sub-tenant is often difficult, so you will actually find it hard to fill all your excess space with companies that look like you and pay on time. Yet you will have to furnish and maintain these spaces for the duration of your lease without knowing exactly when you will actually need them. This "wise" decision can therefore cost you a lot of money...

Conversely, companies often underestimate the speed of their growth and find themselves cramped for space sooner than expected. Here too, a prudent decision to limit rental costs can backfire, and after only a few months, the company will have to embark on a new moving project...

Start-up costs

After a few years (if all goes well), you will feel the need to move to a new space more suited to your new ambitions. The commercial lease (or 3-6-9 lease) commits you for 9 years with the possibility of leaving every 3 years. This means that you will owe the landlord all the remaining rent if you wish to leave the premises before the end of the three-year period.

To avoid this, you can look for a successor who will replace you until the end of the lease. Except that here again, things are not so simple. Unless you find the rare gem on your own (which would still involve a considerable cost in terms of time), you will hire a commercial property consultant to save you time and allow you to benefit from his or her network. This is a valuable help, but it will involve additional costs.

Remember that you will also have to carry out work to restore your offices to their original state, a condition very often imposed by landlords in their lease contracts (count €100 excl. tax/m for a complete restoration).

In any case, you will probably have to pay double rent for 2 to 6 months, while the work is completed in your future premises and your old offices are being refurbished after your move.

How can you optimise your expenses?

When you put it all together, the bill gets longer and even though most of the initial expenses will be smoothed out over the life of your lease, the total cost of renting an office is often double the rent charged by the landlord.

The good news is that there are solutions to help companies find the right office space for their needs while optimizing their expenses.

Among the alternatives available to you, Deskeo accompanies you throughout the growth of your company with a customised flexible office service. The perfect compromise between the customisation that a traditional lease allows and the flexibility that a coworking centre offers.

You choose today a space that corresponds to your current needs, from 20 to 1000 workstations. Deskeo takes care of the fitting out of your offices, the work, the purchase of furniture and decoration so that you feel at home, all for a fixed price that covers all the costs mentioned above.

Rent, charges, Capex and Opex are smoothed out in the price of your new space, no GAPD or double rent. Your initial investments and fixed assets are drastically reduced, allowing you to invest in your growth (recruitment, marketing, etc.).

Once your installation is complete, our teams will also take care of the maintenance of your space to relieve you of this mental burden and allow you to concentrate on your activity. Has the air conditioning broken down? A light bulb needs changing? A piece of furniture to replace? Deskeo takes care of everything!

And as soon as you feel the need, we work together to find and optimise your next office on the same basis and without the cost of refurbishment. Simple, clear and precise.

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