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Ease of Doing Business – How conducive is the regulatory environment to starting and operating a business. Source: The World Bank, Doing Business – 2018
Labor Cost – Wages for “Knowledge Workers”. Source: Trading Economics.com, OECD Wage Report, Colliers International
Taxes – Favorability of taxation policies to business. Source: The World Bank, Doing Business – 2018
Tenant Favorable – Assessment of the real estate market condition. Source: Colliers International
Quadrant Legend: Green = FavorableYellow = NeutralRed = Less Favorable
Typical Loss Factor
*
From rentable to useable square feet
Loss Factor Notes:
*We generally delineate between Net (occupiable) and Gross (occupiable plus common area/amenity)
Landlord Concessions
Fit-Out Concession
The Landlord typically provides a contribution or concession to fit-out as a part of the lease transaction.
Amount of Fit-Out Concession
$37/sf-$325/sf
Typical range of fit-out contribution.
Fit-Out Cost Notes:
Incentives are also provided in the form of rent-free periods and rent abatement.
Expressed as a % of year 1 rent multiplied by term. Broad incentive ranges between 10-20% of gross rental for normalised markets (balanced supply/demand). Low based on a 5 year lease, high based on a 10 year lease.
Rent-Free Period
The Landlord typically provides a contribution or concession in the form of a rent-free period.
Standard Range of Rent-Free Months
2mo.-4mo.
Typical number of rent-free months.
Rent-Free Period Notes:
However, tenants will typically utilize an incentive to fund its fit-out with any residual incentive taken as either rent-free or abatement.
Figures assumes a 5-year lease and is not in addition to the fit-out contribution noted above.
Payment of Fees/Commissions
The Landlord typically pays the tenant rep broker’s fee.
Lease Provisions
Lease Term
5yrs.-10yrs.
Typical lease term in years.
Operating Expenses & Service Charges Included
Quoted market rent typically does not include operating expenses (service charges). There are additional charges that apply to leasing space.
Additional Charges
$1/sf-$2/sf
Estimated range for all additional charges per Square Feet.
Additional Charges:
Utilities
Service Charges
Stamp Duty
Electric
Rates
HST
Cleaning
Hydro
Registration Fees
Taxes
Insurance
VAT
Other
Service Charge Notes:
Rent may be quoted as a Net rent (rent only) plus Outgoings (service charges) or a Gross rent (rent plus outgoings) depending on how the landlord administers and manages the building. Landlord's generally charge tenancy and common area cleaning in addition to rent and outgoings. The common area cleaning component should be added to the rent and outgoings to get a true indication of the grossed up rent.
All outgoings (service fee) - as noted following and expressed monthly. Cleaning often charged in addition to landlord outgoings charges.
The lessee is responsible for their own utilities / consumables. Cleaning is charged as noted below. Stamp and lease registration is payable by the lessee only after execution and in relation to their own lease.
Lease Fundamentals: The following apply to both office and industrial leases.
Lease Execution Requirements:
Requirements Notes:
Office: Lessee break provisions are fairly common however generally carry a 'break fee'
Industrial: rare - usually not
Negotiated Subletting/Assignment
Typically, the tenant's right to sublease or assign the space is negotiated in the lease agreement. Landlord Consent: Typically, the landlord's written consent IS still required.
Statutory Subletting/Assignment
This is NOT a statutory right. Landlord Consent: The Landlord's consent is still required.
Statutory Subletting/Assignment Notes:
Lessor acting reasonably. By agreement between parties and is contracted into the lease.
Blend & Extend Strategies
Typically, a tenant can take advantage of "blend & extend" ("forward renewal", "early renewal", etc.) strategies when the appropriate market conditions exist.
Blend & Extend Notes:
Also known as lease re-gearing
Statutory Early Termination
This is NOT a statutory termination right.
Negotiated Early Termination
It IS typical for tenants to be able to negotiate an early termination right in the lease agreement.
Typical Cost to Terminate Early
$2
Typical cost to terminate early.
Early Termination Notes:
Lessee break provisions are fairly common however, generally carry a "break fee"
Typical cost: Varies depending on residual lease liability
Obligations Upon Lease Expiration
Basic broom clean condition and removal of special installations.
Dilapidations.
Complete restoration to shell.
Other
Tenant Obligation Notes:
Make Good unless contracted out by agreement.
Workplace
Regional Office Space
12sf-15sf
Typical Square Feet per employee (includes office square footage for employees and contractors).
Regional HQ Office Space
10sf-12sf
Typical Square Feet per employee (includes office square footage for employees and contractors).
Workplace Notes:
Quoted in square meters.
Sydney & Melbourne is a leading market in this category.
Desk Sharing
Desk-sharing is a common practice in the market.
Desk Sharing Average
0.85
Average headcount per workstation.
Urbanization of the workforce is: Equal to several other considerations driving location decisions
Industrial Occupier Market Condition
1,1,1,1
Ease of Doing Business – How conducive is the regulatory environment to starting and operating a business. Source: The World Bank, Doing Business – 2018
Labor Cost – Wages for “Knowledge Workers”. Source: Trading Economics.com, OECD Wage Report, Colliers International
Taxes – Favorability of taxation policies to business. Source: The World Bank, Doing Business – 2018
Tenant Favorable – Assessment of the real estate market condition. Source: Colliers International
Quadrant Legend: Green = FavorableYellow = NeutralRed = Less Favorable
Landlord Concessions
Fit-Out Concession
The Landlord typically provides a contribution or concession to fit-out as a part of the lease transaction.
Amount of Fit-Out Concession
$5.2/sf-$20/sf
Typical range of fit-out contribution.
Fit-Out Cost Notes:
Typically between 5% and 8% of the total net rent; usually offered as rent-free. Low based on a 5 year term. High Based on 10 year term.
Rent-Free Period
The Landlord typically provides a contribution or concession in the form of a rent-free period.
Payment of Fees/Commissions
The Landlord typically pays the tenant rep broker’s fee.
Lease Provisions
Lease Term
3yrs.-10yrs.
Typical lease term in years.
Operating Expenses & Service Charges Included
Quoted market rent typically does not include operating expenses (service charges). There are additional charges that apply to leasing space.
Additional Charges
$0.2/sf-$0.5/sf
Estimated range in total for all additional charges per Square Feet.
Additional Charges:
Utilities
Service Charges
Stamp Duty
Electric
Rates
HST
Cleaning
Hydro
Registration Fees
Taxes
Insurance
VAT
Other
Service Charge Notes:
Building scale, location and inclusion in a mixed used precinct with office does have a significant impact.
Lease Fundamentals: The following apply to both office and industrial leases.
Lease Execution Requirements:
Requirements Notes:
Office: Lessee break provisions are fairly common however generally carry a 'break fee'
Industrial: rare - usually not
Negotiated Subletting/Assignment
Typically, the tenant's right to sublease or assign the space is negotiated in the lease agreement. Landlord Consent: Typically, the landlord's written consent IS still required.
Statutory Subletting/Assignment
This is NOT a statutory right. Landlord Consent: The Landlord's consent is still required.
Statutory Subletting/Assignment Notes:
Lessor acting reasonably. By agreement between parties and is contracted into the lease.
Blend & Extend Strategies
Typically, a tenant can take advantage of "blend & extend" ("forward renewal", "early renewal", etc.) strategies when the appropriate market conditions exist.
Blend & Extend Notes:
Also known as lease re-gearing
Statutory Early Termination
This is NOT a statutory termination right.
Negotiated Early Termination
It IS typical for tenants to be able to negotiate an early termination right in the lease agreement.
Typical Cost to Terminate Early
$0.5
Typical cost to terminate early.
Early Termination Notes:
Lessee break provisions are fairly common however, generally carry a "break fee"
Typical cost: Varies depending on residual lease liability
Obligations Upon Lease Expiration
Basic broom clean condition and removal of special installations.
Dilapidations.
Complete restoration to shell.
Other
Tenant Obligation Notes:
Make Good unless contracted out by agreement.
Section 1. Fit Cost Data
Value-Added Opportunities:
By negotiating regional/global supply agreements, significant saving can be realized on the costs for the supply of workstations, task chairs, storage and loose furniture.
Total Fit-Out Cost
$1964/sf
Class A Office
$1100/sf
Class B Office
$707/sf
Flex Office / Warehouse
$511/sf
Warehouse
Furniture Cost
$236/sf-$314/sf
Class A Office
$157/sf-$236/sf
Class B Office
$79/sf-$157/sf
Flex Office / Warehouse
$79/sf-$118/sf
Warehouse
Low Voltage Cabling Cost
$157/sf-$196/sf
Class A Office
$118/sf-$157/sf
Class B Office
$79/sf-$118/sf
Flex Office / Warehouse
$79/sf
Warehouse
Construction to Move-in Cycle Time
12wks-16wks
Class A Office
12wks-16wks
Class B Office
12wks-16wks
Flex Office / Warehouse
12wks-16wks
Flex Office / Warehouse
Section 2. Scope of Work Description
Phase 1: Services Before and During the Transaction
Review the LOI and work letter portion of the Lease to ensure that the clients interests are protected during the build-out of the project.
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Advise Colliers broker and client on project issues and their resolution as they occur.
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Participate in building tours, if requested, to evaluate building systems and other cost-related observations and prepare a building due diligence report
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Develop high-level project estimate and timeline based on test fit and Client standards
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Schedule and chair Schematic Drawings and Design Development Drawings review meetings/conference calls
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Phase 2: Service Before and During the Design Process
Develop preliminary project budget and schedule.
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Develop the RFP for selection of a space planner/architect and any other consultants identified and required
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Analyze, compare and evaluate responses to the RFP.
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Orchestrate the space planner/architect interview process.
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Negotiate, on behalf of the client, professional services agreements with the space planner/architect and other consultants.
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Review architect’s final Program of Requirements.
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Monitor the design team’s schedule of deadlines and deliverables. Coordinate meetings with the design team and the client. Manage the design process on behalf of the client.
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Review and recommend payment of the invoices for services. Submit invoices for payment to landlord or client and prepare monthly reports of project costs versus project budget.
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Negotiate all client-vendor contractors (IT, AV, Security/Access Control, Signage, High Density Filing) on behalf of client.
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Coordinate with either Architect or General Contractor in permitting process
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Schedule and chair weekly design review meetings/conference calls
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Other Value-Add Services: Test fits (including Look & Feel) - Cost Estimates - Schedule/timing/phasing scenarios - Floor plan, core and circulation efficiency ratios(GIA vs NIA) (NOA vs NIA) - Technical due diligence/Assessments - We may pack everything into a Feasibility Study or proposed them separately depending on the situation.
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Phase 3: Services Before Construction
Liaise with the Landlord’s Representative.
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Prequalify a list of general contractors to be interviewed (consult lease to confirm any Landlord required GCs).
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Develop the RFP, including Landlord and/or Lease required documents, for selection of a general contractor.
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Analyze, level, and evaluate the responses to RFP.
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Orchestrate general contractor interview process and prepare evaluation scorecard.
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Review all proposed subcontractors and monitor the general contractor’s subcontractor bid process to ensure integrity of the process and quality of the workmanship.
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Monitor the general contractor’s schedule of deadlines and deliverables. Coordinate meetings between the design team, general contractor, client and appropriate vendors.
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Negotiate, on client's behalf, the General Contractor agreement for Client approval
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Schedule and coordinate Architect's 90% Construction Drawings review
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Develop Project Cost Summary + Invoice Tracker and update weekly
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Phase 4: Services During Construction
Coordinate with the Landlord’s Representative.
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Conduct weekly construction meetings to assess progress, quality and conformance with the Contract Documents and distribute minutes of meetings.
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Monitor the general contractor’s schedule.
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Monitor the construction budget.
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Review, and recommend for payment, the contractor’s Applications for Payment.
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Monitor all project documentation.
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Act at all times as client’s liaison to vendors contracted directly by Client (IT, AV, Security/Access Control, Signage).
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Oversee the punch list process to ensure acceptable completion of all items.
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Close out all consultant, contractor and vendor contracts.
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Submit General Contractor, vendor, and consultant invoices to Landlord for reimbursement per the Lease Workletter
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Review and recommend for payment all General Contractor, vendor, and consultant invoices; submit to Client for approval
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Deliver close-out documents, as specified in the Lease, to Client
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Coordinate value/engineering process, if required.
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Additional Services: Services During Relocation
Develop RFP for moving companies, evaluate responses and recommend selection of moving company or identify, interview and review proposal for services from relocation consultants.
Typically included in "Project Management" scope of work.
Represent Client in development of move strategy.
Typically included in "Project Management" scope of work.
Monitor development of move activity checklist.
Typically included in "Project Management" scope of work.
Additional Services: Project Management Services Related to Furniture/Workstation Procurement
Conduct bid process for all furniture (workstations, case goods, seating, filing) purchases specified by the architect and/or client.
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Conduct bid process for refurbishment of existing furniture and/or workstations.
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Evaluate bids and negotiate purchase order with manufacturer(s).
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Negotiate national buying contract with select furniture dealerships, using Colliers International purchasing power
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Business Climate Business Climate data provided in partnership with Hickey & Associates. Rankings reported on a scale of 1 (least favorable) to 10 (most favorable). Please refer to the full report Explore 2017 for additional details.
Incentives and Labor Market
8, 28/10
Incentives Value potential, diversity/number of programs
8, 28/10
Job Saturation Competition for workers
7, 37/10
Wage Inflation Rise in wages (past 10 years, local currency)
Educational Attainment
10, 010/10
HS Ed Eq Proportion of population attaining this level
10, 010/10
University Ed Proportion of population attaining this level
10, 010/10
Overall Composite average of HS Ed Eq & University
Composite
8, 28/10
Additive sum of incentives, saturation, overall ed attainment, and wage inflation
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