Preparing to move office

Office relocation guide: chapter one

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Introduction

Few businesses employ someone whose main role is to do their office relocation. The task requires multiple skill sets, attracting scrutiny from the boardroom to the post room, and may well fall to someone who has never done it before. If that’s the position you now find yourself in, you’ll be surprised how much time needs to be invested to get it right. It’s a stressful process which will demand a lot of focus on top of your usual job. This guide has been written to give you an overview of what to expect and when.

Forsters has one of the few dedicated occupier practices in the UK and our London-based team sits within a full-service real estate group of over 120 lawyers. We combine the specialist skills and market knowledge with the scale and support necessary to service any office relocation or portfolio management requirement.

Obviously, no written guide such as this can be considered a substitute for obtaining the appropriate professional support needed to deliver a successful project on time and on budget.

As well as acting on every type of office move for clients over the years, I’m also in the unique position of having effectively been both the client and lawyer in dealing with Forsters’ own office requirements over the past 15 years.

My number one piece of advice is to start early, have a clear plan and build a strong project team. Choosing the right people who can provide the right advice at the right time is crucial for success.

Glenn DunnPartner, Head of Corporate Occupiers and Tenants

Chapter one: preparing to move

Ensuring that you have a detailed plan in place at the outset of your project is vital to ensure success. These first steps will underpin the strategy of your move and should not be overlooked:

Your existing premises

Even before you beginning looking for new premises, it is important to prepare an exit strategy for leaving your existing space. For example, is your current lease term coming to an end? Are you planning to exercise a break right or will you try to assign your space to a third party? The method of disposal will be a key factor in your exit strategy and have a large impact on timing.

Ensure you carefully review your existing lease to quantify disposal costs and assess dilapidations obligations. Your strategy should take into account the timetable for disposing of and vacating these premises. You should seek to minimise double overheads by ensuring you do not leave it too late, which would require a temporary move into “swing space” and double relocation costs.

How long you need will depend on your exact circumstances, but you can’t start planning too soon. We advise clients to start the process several years before the desired (or required) move date, especially when relocating to a building under construction or substantial refurbishment. If you have less time than that, don’t panic, seek advice now, as there may be steps which can still be taken.

Your next step should be to appoint a commercial real estate agent to source available premises and negotiate the best possible letting terms. The agent should have intimate market knowledge of the area or areas you would like to move to and the types of premises you require. They should also be familiar with the identity of the relevant landlords and their advisers.

We have excellent working relationships with the leading UK agents and their tenant representation teams and can assist with introductions, if required. The agent should also be able to carry out (or recommend someone who can carry out) surveys and space planning, as well as recommend potential fit out companies and other professionals such as dilapidations surveyors.

The landlord’s agent will usually prepare a non-legally binding document called Heads of Terms or “HoTs” (also sometimes referred to as a letter of intent or term sheet), which outlines the agreed commercial terms. The HoTs should be circulated to your agent and lawyer for comments. Once the HoTs are agreed it is much harder to negotiate changes, so it is important that they are carefully reviewed and fully understood, both legally and commercially.

Once HoTs have been agreed, the status of the premises should change to “under offer” and should no longer be marketed. You may want to consider including an obligation in the HoTs for the landlord to grant you exclusivity for a period of time. The landlord’s lawyer will produce draft documents, based on the HoTs, for your lawyer to review and negotiate. Please note that no standard form of lease exists in the UK although there are market norms for the content of most lease agreements.

Make sure any consents required for the lease itself or to authorise your fit out are identified by the landlord and referenced in the HoTs. Applications for consent will usually be dealt with between lawyers, so it is critical to keep them informed of your plans. In addition to the consent of your landlord, any superior landlord and potentially their lenders, your fit out may also require planning permission and sometimes listed building consent.

Factor in the lead-times for the order of certain facilities and equipment (e.g. telecoms and data lines (known as wayleaves), air conditioning, power supplies, furniture). Wayleaves from internet service providers are renowned for taking a long time to agree and must be engaged with at an early stage.

The legal process usually takes several weeks from agreement of the HoTs to having a binding contract (either an agreement for lease or straight to lease) and can take months depending on the complexity of the transaction. There will be a lead-time for the carrying out of searches which should be ascertained as soon as you instruct lawyers.

Our occupier team

Whether it’s a major office HQ or a small space requirement, our occupier team brings expertise and insight to every corporate relocation, expansion, or first-time acquisition.

How our occupier team can help you

Chapter two: choosing your new office space

As well as aesthetic and any bespoke requirements of your business there are certain legal and practical considerations that should not be overlooked.

Read chapter two