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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 – 2020
Labor Cost – Wages for skilled office workers. Source: Global Wage Index, Hickey & Associates 2020
Taxes – Favorability of taxation policies to business. Source: The World Bank, Doing Business – 2020
Tenant Favorable – Assessment of the real estate market condition for office space. Source: Colliers International
Quadrant Legend: Blue = FavorableMedium Blue = NeutralRed = Less Favorable
Typical Loss Factor
*
From rentable to useable square meters
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
$540/sm-$2000/sm
Typical range of fit-out contribution.
Fit-Out Cost Notes:
Headline total incentive package (18%-25% is negotiated and the tenant decides in which form it will take it.
Low figure: Price / Per SQM Fit Out Contribution based on a typical 5 year term, 18% gross incentive and a rent of $600/sqm.
High figure: Price / Per SQM Fit Out Contribution based on a typical 5 year term, 25% gross incentive and a rent of $1,600/sqm.
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
1mo.-5mo.
Typical number of rent-free months.
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
$150/sm-$270/sm
Estimated range for all additional charges per Square Meters.
Additional Charges:
Utilities
Service Charges
Stamp Duty
Electric
Rates
HST
Cleaning
Hydro
Registration Fees
Taxes
Insurance
VAT
Other
Lease Fundamentals: The following apply to both office and industrial leases.
Lease Execution Requirements:
Typical upfront requirements
None for strong credit tenants
Upfront rental payment
Security deposit
Corporate guarantee
Not Applicable
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 NOT required.
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:
Depending on the motivation from the Landlord.
Statutory Early Termination
This is NOT a statutory termination right.
Negotiated Early Termination
It is NOT typical for tenants to be able to negotiate an early termination right in the lease agreement.
Workplace
Regional Office Space
10sm-15sm
Typical Square Meters per employee (includes office square footage for employees and contractors).
Regional HQ Office Space
8sm-15sm
Typical Square Meters per employee (includes office square footage for employees and contractors).
Workplace Notes:
Regional: A regional office of 2,000sqm would have a approx 167 employees using a utilization rate of 12
HQ: A HQ of 10,000sqm would have approx 1,000 employees using a utilization rate of 10.
Sydney & Melbourne market is typical.
Desk Sharing
Desk-sharing is not a common practice in the market.
Desk Sharing Average
0.8
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 – 2020
Labor Cost – Wages for manuafacturing and warehouse/distribution office workers. Source: Global Wage Index, Hickey & Associates 2020
Taxes – Favorability of taxation policies to business. Source: The World Bank, Doing Business – 2020
Tenant Favorable – Assessment of the real estate market condition for industrial space. Source: Colliers International
Quadrant Legend: Blue = FavorableMedium Blue = 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.
Fit-Out Cost Notes:
In most cases the leasing incentive as we call it in Australia is made available for fit out, rent free or rent abatement.
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
1mo.-3.5mo.
Typical number of rent-free months.
Rent-Free Notes:
Melbourne: 2.5 months - 3.5 months per year
Sydney: 1 month - 1.5 months per year
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 includes operating expenses (service charges).
Additional Charges
$13/sm-$25/sm
Estimated range in total for all additional charges per Square Meters.
Additional Charges:
Utilities
Service Charges
Stamp Duty
Electric
Rates
HST
Cleaning
Hydro
Registration Fees
Taxes
Insurance
VAT
Other
Service Charge Notes:
Sydney: $20-$25 AUD per sqm
Melbourne: $13 - $18 AUD per sqm
Lease Fundamentals: The following apply to both office and industrial leases.
Lease Execution Requirements:
Typical upfront requirements
None for strong credit tenants
Upfront rental payment
Security deposit
Corporate guarantee
Not Applicable
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 NOT required.
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:
Depending on the motivation from the Landlord.
Statutory Early Termination
This is NOT a statutory termination right.
Negotiated Early Termination
It is NOT typical for tenants to be able to negotiate an early termination right in the lease agreement.
Project Management
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
$2500/sm
Class A Office
$2500/sm
Class B Office
$750/sm
Flex Office / Warehouse
$500/sm
Warehouse
Furniture Cost
$1200/sm
Class A Office
$1000/sm
Class B Office
$500/sm
Flex Office / Warehouse
$250/sm
Warehouse
Low Voltage Cabling Cost
$200/sm
Class A Office
$200/sm
Class B Office
$200/sm
Flex Office / Warehouse
$200/sm
Warehouse
Other (IT/etc) Cost
$500/sm
Class A Office
$500/sm
Class B Office
$350/sm
Flex Office / Warehouse
$350/sm
Warehouse
Construction to Move-in Cycle Time
9wks
Class A Office
7wks
Class B Office
4wks
Flex Office / Warehouse
4wks
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.
Typically included in “Design/Build” scope of work.
Represent Client in development of move strategy.
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Monitor development of move activity checklist.
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Represent client on site during move process.
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” 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.
Operating Environment Data provided in partnership with Hickey & Associates. Rankings reported on a scale of 1 (least favorable) to 10 (most favorable).
Human Capital
5, 55/10
Labor Force Growth Labor force growth rate (past 5 years)
7, 37/10
Wage Inflation Rise in wages (past 5 years, local currency)
6, 46/10
Millenials Proportion of population in the age 20-39 cohort
6, 46/10
High School Edu Equiv Proportion of population attaining this level
6, 46/10
University Edu Proportion of population attaining this level
6, 46/10
Overall Edu Composite average of High School & University
6, 46/10
Human Capital Composite
Business Climate
8, 28/10
Innovation Presence of innovative factors in economy
8, 28/10
Economic Risk Resilience of economy to unexpected events
6, 46/10
Business Environment Friendliness of business environment
8, 28/10
Incentives Value potential, diversity/number of programs
8, 28/10
Business Climate Composite
Operating Environment Composite
7, 37/10
Combined average score of Human Capital and Business Climate factors
[1]Currency conversion works for estimate purposes only and may not reflect real-time values.
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information only. Colliers International makes no guarantees, representations or
warranties of any kind, expressed or implied, regarding the information including, but not
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undertake their own inquiries as to the accuracy of the information. Colliers International
excludes unequivocally all inferred or implied terms, conditions and warranties arising
out of this document and excludes all liability for loss and damages arising there from.
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