Sydney & Melbourne

Space Measurement Standard

PCA*

Space Unit of Measure

Square Meters

Financial Data Below Reported In

AUD

Notes:

*Property Council of Australia (BOMA was the predecessor of the PCA)
*
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.

Fit-Out Cost Notes:

Incentives are also provided in the form of rent-free periods and rent abatement.

Express as % of Year 1 rent. Broad incentive ranges between 15-30% for normalized markets (balanced supply/demand).

Rent-Free Period

In addition to the fit-out contribution, the Landlord typically provides a contribution or concession in the form of a rent-free period.

Standard Range of Rent-Free Months

9mo.-18mo.

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.

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

$15/sm-$40/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

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.

Figures for common area/tenancy cleaning ($/sqm)

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 Timeline: The following apply to both office and industrial leases.

Lease Execution Requirements:

Requirements Notes:

Office: landlords' standard position is one months gross rent however, dependent on existing relationships or lessee covenant strength this can be significantly reduced if not removed altogether.

Industrial: security deposit - one month's gross rent, returned on execution of lease. Performance guarantee in form of bank guarantee typically 6 months gross rent

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.

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.

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

12sm-15sm

Typical Square Meters per employee (includes office square footage for employees and contractors).

Regional HQ Office Space

10sm-12sm

Typical Square Meters per employee (includes office square footage for employees and contractors).

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

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:

Typically between 5% and 8% of the total net rent; usually offered as rent-free.

Rent-Free Period

In addition to the fit-out contribution, the Landlord typically provides a contribution or concession in the form of a rent-free period.

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

$10/sm-$18/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

Lease Timeline: The following apply to both office and industrial leases.

Lease Execution Requirements:

Requirements Notes:

Office: landlords' standard position is one months gross rent however, dependent on existing relationships or lessee covenant strength this can be significantly reduced if not removed altogether.

Industrial: security deposit - one month's gross rent, returned on execution of lease. Performance guarantee in form of bank guarantee typically 6 months gross rent

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.

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.

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/sm

Class A Office

$1100/sm

Class B Office

$707/sm

Flex Office / Warehouse

$511/sm

Flex Office / Warehouse

Furniture Cost

$236/sm-$314/sm

Class A Office

$157/sm-$236/sm

Class B Office

$79/sm-$157/sm

Flex Office / Warehouse

$79/sm-$118/sm

Warehouse

Low Voltage Cabling Cost

$157/sm-$196/sm

Class A Office

$118/sm-$157/sm

Class B Office

$79/sm-$118/sm

Flex Office / Warehouse

$79/sm

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.
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, 2 8/10

Incentives
Value potential, diversity/number of programs

8, 2 8/10

Job Saturation
Competition for workers

7, 3 7/10

Wage Inflation
Rise in wages (past 10 years, local currency)

Educational Attainment

10, 0 10/10

HS Ed Eq
Proportion of population attaining this level

10, 0 10/10

University Ed
Proportion of population attaining this level

10, 0 10/10

Overall
Composite average of HS Ed Eq & University

Composite

8, 2 8/10

Additive sum of incentives, saturation, overall ed attainment, and wage inflation

This document has been prepared by Colliers International for advertising and general information only. Colliers International makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. Any interested party should 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. This publication is the copyrighted property of Colliers International and/or its licensor(s). ©2017. All rights reserved.

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