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Colliers International | Global Occupier Guide

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Johannesburg

SAPOA*

Space Measurement Standard
SQMT
SQFT
Space Unit of Measure

ZAR convert

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Financial Data Currency[1]

Yes

Transfer Taxes

Notes:

*SAPOA - South African Property Owners Association

Office 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 = Favorable Yellow = Neutral Red = Less Favorable

Typical Loss Factor

*

From rentable to useable square meters

Loss Factor Notes:

*Common area factor

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

R250/sm-R850/sm

Typical range of fit-out contribution.

Fit-Out Cost Notes:

METHOD 1 : 1 month rental for every lease year (minimum 3 yrs) METHOD 2: value per sqm. Low is ZAR 250,- /m², high is ZAR 850,- /m².

Rent-Free Period

The Landlord typically provides a contribution or concession in the form of a rent-free period.

Rent-Free Period Notes:

Deal dependent

Payment of Fees/Commissions

The Landlord typically pays the tenant rep broker’s fee.

Lease Provisions

Lease Term

3yrs.-5yrs.

Typical lease term in years.

Operating Expenses & Service Charges Included

Quoted market rent typically includes operating expenses (service charges).

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

Requirements Notes:

Deposit equal to 3 months rent plus personal surety plus 1st month upfront rental payment

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.

Blend & Extend Strategies

Typically, a tenant can not take advantage of "blend & extend" ("forward renewal", "early renewal", etc.) strategies when the appropriate market conditions exist.

Blend & Extend Notes:

Not typical for standard leases

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.

Early Termination Notes:

Not standard in lease.

Typical cost: if negotiated in lease, exit fee is typically equal to pro rata professional fees and tenant installation allowance

Obligations Upon Lease Expiration

Basic broom clean condition and removal of special installations.
Dilapidations.
Complete restoration to shell.
Other

Tenant Obligation Notes:

Reinstatement cost of premises

Workplace

Regional Office Space

18sm-25sm

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

Regional HQ Office Space

18sm-25sm

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

Desk Sharing

Desk-sharing is not a common practice in the market.

Desk Sharing Notes:

Not common, but it is increasingly applied.

Urbanization of the workforce is: A major factor 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 = Favorable Yellow = Neutral Red = Less Favorable

Landlord Concessions

Fit-Out Concession

The Landlord typically does not provide a contribution or concession to fit-out as a part of the lease transaction.

Amount of Fit-Out Concession

R250/sm-R500/sm

Typical range of fit-out contribution.

Rent-Free Period

The Landlord typically provides a contribution or concession in the form of a rent-free period.

Rent-Free Notes:

Deal dependent

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 includes operating expenses (service charges).

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

Requirements Notes:

Deposit equal to 3 months rent plus personal surety plus 1st month upfront rental payment

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.

Blend & Extend Strategies

Typically, a tenant can not take advantage of "blend & extend" ("forward renewal", "early renewal", etc.) strategies when the appropriate market conditions exist.

Blend & Extend Notes:

Not typical for standard leases

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.

Early Termination Notes:

Not standard in lease.

Typical cost: if negotiated in lease, exit fee is typically equal to pro rata professional fees and tenant installation allowance

Obligations Upon Lease Expiration

Basic broom clean condition and removal of special installations.
Dilapidations.
Complete restoration to shell.
Other

Tenant Obligation Notes:

Reinstatement cost of premises

Section 1. Fit Cost Data

Total Fit-Out Cost

R306.6/sm

Class A Office

R168/sm

Class B Office

R136.5/sm

Class C Office

R91.35/sm

Warehouse

Furniture Cost

R259.35/sm

Class A Office

R152.25/sm

Class B Office

R113.4/sm

Class C Office

R113.4/sm

Warehouse

Floor Covering Cost

R44.1/sm

Class A Office

R27.3/sm

Class B Office

R13.55/sm

Class C Office

R13.55/sm

Warehouse

Partitioning Walls Cost

R49.35/sm

Class A Office

R32.55/sm

Class B Office

R17.33/sm

Class C Office

R17.33/sm

Warehouse

Other (IT/etc) Cost

Other Cost Notes:

Euro 58 per sqm through rate pending on client's requirement.

Typical Manpower Hourly Rates

R40/hr

Senior Project Manager

R28/hr

Project Manager

R28/hr

Junior Project Manager

R5/hr

Project Assistant

R15/hr

Workplace Consultant

R20/hr

Designer/Architect

Project Management Base Fee

8.75%

Base fee [%] for the fitout of above office of 1000 m2.

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.
Advise Colliers broker and client on project issues and their resolution as they occur.
Typically included in "Project Management" 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.
Develop high-level project estimate and timeline based on test fit and Client standards
Typically included in "Project Management" scope of work.
Schedule and chair Schematic Drawings and Design Development Drawings review meetings/conference calls
Typically included in "Project Management" scope of work.
Define workplace strategy for client, research what kind of location, office / work environment accelerates business
Typically included in "Project Management" scope of work.
Define program of requirements for location, building and interior characteristics
Typically included in "Project Management" scope of work.
Engage with the Client Facilities Management (FM) Operations team to ensure alignment with Client standards
Typically included in "Project Management" 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.
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.
Analyze, compare and evaluate responses to the RFP.
Typically included in "Project Management" scope of work.
Orchestrate the space planner/architect interview process.
Typically included in "Project Management" 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.
Review architect’s final Program of Requirements.
Typically included in "Project Management" 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.
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.
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.
Schedule and chair weekly design review meetings/conference calls
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.
Define interior guidelines for architect based on workplace strategy
Typically included in "Project Management" scope of work.
Control workplace strategy and functionality and during design process
Typically included in "Project Management" scope of work.

Phase 3: Services Before Construction

Liaise with the Landlord’s Representative.
Typically included in "Project Management" scope of work.
Prequalify a list of general contractors to be interviewed (consult lease to confirm any Landlord required GCs).
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.
Analyze, level, and evaluate the responses to RFP.
Typically included in "Project Management" 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.
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.
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.
Conduct weekly construction meetings to assess progress, quality and conformance with the Contract Documents and distribute minutes of meetings.
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.
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.
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.
Close out all consultant, contractor and vendor contracts.
Typically included in "Project Management" 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.
Review and recommend for payment all General Contractor, vendor, and consultant invoices; submit to Client for approval
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.
Provide as-built drawings and O&M Manuals to Client FM Operations team
Typically included in "Project Management" 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 “Design/Build” scope of work.
Represent Client in development of move strategy.
Not typically included at all, but available for an additional fee.
Represent client on site during move process.
Not typically included at all, but available for an additional fee.

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 “Design/Build” scope of work.
Conduct bid process for refurbishment of existing furniture and/or workstations.
Typically included in “Design/Build” scope of work.
Evaluate bids and negotiate purchase order with manufacturer(s).
Typically included in “Design/Build” scope of work.
Negotiate national buying contract with select furniture dealerships, using Colliers International purchasing power
Typically included in “Design/Build” scope of work.
Change management before, during and after moving to the new work environment
Typically included in “Design/Build” scope of work.
Measuring/monitoring (KPI's) how the way of working and building accelerates business and goals of the client
Typically included in “Design/Build” scope of work.
[1]Currency conversion works for estimate purposes only and may not reflect real-time values.

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