How to Enter the Commercial leasing Space in Australia?



27 Mar 2023

Commercial leasing is one of the pivotal aspects of any business. Australia’s commercial real estate market has been experiencing inflation; business owners are looking for rental properties instead of buying new ones at a higher interest rate.

To generate higher productivity and stability, you can enter the commercial lease space in Sydney, Melbourne, Brisbane and other metropolitan cities of Australia. However, the leased property must be researched and inspected thoroughly before signing the business premises lease agreement.

Paying attention to the location, security deposits, tenant’s roles and responsibilities, and other aspects is crucial because it is a legally binding of two parties. There is a long-term financial obligation that can determine the success of your company.

Here are some of the key tips to help you mark a hassle-free entry in the commercial lease market:


Check the Duration of Your Commercial Lease

It is always important to know the lease term before signing the agreement. Longer durations are always recommended in commercial leases as this gives a stable physical presence and add value to the business. A prime location locked in for long durations also increase the employee’s retention rate, increases your visibility and helps you operate business activities without any hindrance.

Whether it is a retail space or a spacious office in Melbourne, it must be leased for at least 11 to 15 years. Also, ensure the agreement has a lease renewal clause.

Create A Rough Budget for Rental Expenses

An estimated budget for rental expenses before getting into the commercial lease property market in Australia can make things easy for you. When preparing your budget, you can research the latest market trends, rental yields, and other key aspects.

Also, remember that the monthly cost will increase and can become huge after a few years into the lease contract. So, prepare a lease budget and choose a property where you can pay rent annually without affecting the cash flow of your business.

Know Your Specific Business Needs

This is a crucial step that can help you decide when opting for commercial lease space in Australia. Know your specific business requirements for the next 7-12 years. Whether you want to expand your business, hire new employees, or open new branches depends on your targeted goals and overview.

It is also important to know the permitted use of the premises and the sub-leasing clause in the contract. Well, the permitted use will depend on the zoning laws, and you need to approach the local council for the same. This is crucial if you want to add a new product line to the existing firm. If you want to use the extra space to gain capital via sub-leasing, then ask your real estate agent to add the conditions to the lease contract.

Go Through the Terms of Lease Contract

Entering the commercial lease space in Australia requires proper planning and awareness. The tenant must verify each clause before binding into the agreement. Take legal advice to evaluate the documents and know everything about the roles, rules and obligations of both parties.

Everything should be mentioned in the agreement so that you can make the right decision. A good rental contract consists of all the key information, rental bond amount, clauses, roles, cleaning requirements, and much more. It also states that the commercial property should be returned cleanly. Remember to check where you can make renovations to the property.

Calculate the Outgoing Costs

As a tenant, you are responsible for paying for all the outgoings. Add this to your budget and check with your accountant whether you can bear the monthly rent and additional costs. The basic outgoings include property insurance and council rates. Corporation fees, tax, water rates and taxes.  You can also look for lease incentives offered by the  Australian government to reduce your load.

Know Everything About Security Deposit

The tenant needs to pay a security deposit when signing the lease agreement. However, the amount can easily be negotiated. It can be around three to six months of rent or a bank guarantee. This guarantee can be accessed when you offer security to the bank. You may lose a part of your deposited security in case of a breach of an agreement.

Wrapping Up

Entering the commercial lease space requires proper research and detailed information about the obligations of lease contract. These tips will help you understand the key aspects when looking for a commercial space for your business in Australia.

Our Sponsors