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Colliers International | Global Occupier Guide

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Rome

CRE*

Space Measurement Standard
SQMT
SQFT
Space Unit of Measure

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Financial Data Currency[1]

No

Transfer Taxes

Notes:

*No specific and formal standard at the moment but IPMS near future. CRE market local practice for determining the Gross Leasable Area in sqm.

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

10-15%*

From rentable to useable square meters

Loss Factor Notes:

*10-15% as an average, but depends very much on building age and efficiency.

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.

Fit-Out Cost Notes:

Fit-out and personalization normally is paid by tenant. In specific cases the landlord (mostly in case of new developments or heavy refurbishments) may provide a contribution for internal work that relate to structural parts of the premises - still subject to negotiation.

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

3mo.-12mo.

Typical number of rent-free months.

Rent-Free Period Notes:

Yes - Subject to negotiation. As a range (always negotiable) we may consider 3-12 months.

Payment of Fees/Commissions

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

Payment of Fees/Commissions Notes:

As negotiated.

Lease Provisions

Lease Term

6yrs.-12yrs.

Typical lease term in years.

Lease Term Notes:

6+6 years as a standard lease term; but we are observing more and more 7+6 years leases which allows the landlord the possibility to grant up to 12 months of free rent, keeping 6 years of secured revenues.

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

€35/sm-€50/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:

Service charges include electric/cleaning only for common parts. Service charges include the HVAC if provided centrally in the building, as well as central receptionist at the building entrance. Building insurance is included but not the insurance that covers the activities of the tenant. Own consumption costs to be paid separately. VAT to be paid separately on top. Lease registration tax to be paid by the tenant annually in the amount of 0.5% of annual rental payment (the registration tax in Italy is 1% of annual rent - paid 50/50% by landlord and tenant).

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:

Upfront quarterly payment of the rent and bank guarantee corresponding to approximately 1 year of rent and covering the whole lease term.

Negotiated Subletting/Assignment

The tenant's right to sublease or assign the space typically is NOT negotiated in the lease agreement.
Landlord Consent: Typically, the landlord's written consent IS still required.

Negotiated Subletting/Assignment Notes:

Typically the sublease clause is present for the the same group's/holding companies - but must be negotiated during the lease discussion.

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:

Can be negotiated separately.

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:

Early break option to be negotiated separately ALWAYS. *Cost to terminate early always subject to negotiation. In some cases the landlord will ask for penalty.

Obligations Upon Lease Expiration

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

Tenant Obligation Notes:

All tenant personalization must be removed (total reinstatement is usually required).

Workplace

Regional Office Space

10sm-15sm

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

Regional HQ Office Space

15sm-20sm

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

Workplace Notes:

In existing offices, the range is around 10-15 sqm per workstation (Regional) and 15-20 sqm per workstation (HQ) because of higher presence of closed offices (old-style). In the case of relocation of multinational corporations, the requested target max is 10-13 sqm/ws.

Desk Sharing

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

Desk Sharing Average

1.25*

Average headcount per workstation.

Desk Sharing Notes:

*Or 80 workstations/100 people.
We have started to see more corporations applying smartworking and shared desk policy (audit, IT, consulting, industrial and engineering companies etc).

Urbanization of the workforce is: Equal to several other considerations driving location decisions

More and more important, as well as accessibility, vicinity to underground and overall economics.

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.

Fit-Out Cost Notes:

Typically no, if it does not relate to the building structure/improvement. All internal personalization relates to the tenant's business and operations. In case of tenant's exit, the property shall be as universal and flexible for other tenant as possible.

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.

Payment of Fees/Commissions Notes:

As negotiated.

Lease Provisions

Lease Term

6yrs.-18yrs.

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:

Utilities
Service Charges
Stamp Duty
Electric
Rates
HST
Cleaning
Hydro
Registration Fees
Taxes
Insurance
VAT
Other

Service Charge Notes:

Additional charges depends on the typology of activity run in the asset. Electric/cleaning/hydro only for common parts. Own consumption costs to be paid separately, service charges and VAT/Insurance/Utilities/Taxes/Stamp Duty etc. to be paid separately.

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:

Upfront quarterly payment of the rent and bank guarantee corresponding to approximately 1 year of rent and covering the whole lease term.

Negotiated Subletting/Assignment

The tenant's right to sublease or assign the space typically is NOT negotiated in the lease agreement.
Landlord Consent: Typically, the landlord's written consent IS still required.

Negotiated Subletting/Assignment Notes:

Typically the sublease clause is present for the the same group's/holding companies - but must be negotiated during the lease discussion.

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:

Can be negotiated separately.

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:

Early break option to be negotiated separately ALWAYS. *Cost to terminate early always subject to negotiation. In some cases the landlord will ask for penalty.

Obligations Upon Lease Expiration

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

Tenant Obligation Notes:

All tenant personalization must be removed (total reinstatement is usually required).

Section 1. Fit Cost Data

Total Fit-Out Cost

€833.49/sm

Class A Office

€1012.1/sm

Warehouse

Total Fit-Out Cost Notes:

The costs are related to simple fit-out activities.

Furniture Cost

€136.93/sm

Class A Office

€166.7/sm

Warehouse

Furniture Cost Notes:

These costs are typically paid by the client.

Floor Covering Cost

€71.44/sm

Class A Office

€102.4/sm

Warehouse

Floor Covering Cost Notes:

These costs are typically paid by the client.

Partitioning Walls Cost

€297.68/sm

Class A Office

€333.4/sm

Warehouse

Partitioning Walls Cost Notes:

These costs are typically paid by the client.

Other (IT/etc) Cost

€57.15/sm

Class A Office

€57.15/sm

Warehouse

Other Cost Notes:

These costs are typically paid by the client.

Project Management Base Fee

4%

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 “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.
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.
Coordinate with either Architect or General Contractor in permitting process
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.
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.
Not typically included at all, but available for an additional fee.
Define interior guidelines for architect based on workplace strategy
Not typically included at all, but available for an additional fee.
Control workplace strategy and functionality and during design process
Not typically included at all, but available for an additional fee.
Architectural design
Not typically included at all, but available for an additional fee.

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 "Project Management" 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.
Orchestrate general contractor interview process and prepare evaluation scorecard.
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.
Not typically included at all, but available for an additional fee.
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.
Negotiate, on client's behalf, the General Contractor agreement for Client approval
Typically included in "Project Management" scope of work.
Schedule and coordinate Architect's 90% Construction Drawings review
Not typically included at all, but available for an additional fee.
Develop Project Cost Summary + Invoice Tracker and update weekly
Not typically included at all, but available for an additional fee.

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 "Project Management" scope of work.
Monitor the general contractor’s schedule.
Typically included in "Project Management" 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.
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).
Not typically included at all, but available for an additional fee.
Oversee the punch list process to ensure acceptable completion of all items.
Not typically included at all, but available for an additional fee.
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 "Project Management" scope of work.
Deliver close-out documents, as specified in the Lease, to Client
Typically included in "Project Management" scope of work.
Coordinate value/engineering process, if required.
Not typically included at all, but available for an additional fee.
Provide as-built drawings and O&M Manuals to Client FM Operations team
Not typically included at all, but available for an additional fee.

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.
Represent client on site during move process.
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.
Conduct bid process for refurbishment of existing furniture and/or workstations.
Typically included in "Project Management" scope of work.
Evaluate bids and negotiate purchase order with manufacturer(s).
Typically included in "Project Management" scope of work.
Negotiate national buying contract with select furniture dealerships, using Colliers International purchasing power
Typically included in "Project Management" scope of work.
Change management before, during and after moving to the new work environment
Typically included in "Project Management" scope of work.
Measuring/monitoring (KPI's) how the way of working and building accelerates business and goals of the client
Typically included in "Project Management" 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

5, 5 5/10

Incentives
Value potential, diversity/number of programs

8, 2 8/10

Job Saturation
Competition for workers

8, 2 8/10

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

Educational Attainment

6, 4 6/10

HS Ed Eq
Proportion of population attaining this level

6, 4 6/10

University Ed
Proportion of population attaining this level

6, 4 6/10

Overall
Composite average of HS Ed Eq & University

Composite

7, 3 7/10

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

[1]Currency conversion works for estimate purposes only and may not reflect real-time values.

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). ©2018. All rights reserved.

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