Key challenges
The client was facing an upcoming office lease expiry, providing uncertainty beyond 2024.
Office Market
The James Street office market is within a mixed-use precinct consisting of high-end fashion retailers and restaurants. The office vacancy within the precinct was at 0% during the time of negotiation. The tightly held market has experience a significant uptick in rents and reduced incentives over the previous 12 months.
Forecast Employee Growth
Due to changes in mandates around default working location, there was an anticipated increase in office footprint requirements. Due to the unique nature of the current site, the client was hopeful to renew the current lease and reconfigure to optimize the current layout.
Time Limitations
In light of expected growth at the current premises, internal auditing processes delayed decision making impacting leverage in negotiations. TMX's prior relationship with the Landlord enabled transparent conversations alleviating risk of the premises being listed for lease.
Our approach
TMX identified and leveraged landlord relationships to find solutions that enable the current premises, allowing it to remain workable now and into the future.
Office Market Knowledge
- TMX identified Landlord relationships on current New South Wales office transactions to assist negotiations.
- TMX leveraged internal personnel with significant experience dealing in the Brisbane Office Leasing market, leveraging relationships, recent transactions and knowledge.
Property Negotiations:
- TMX negotiated a First Right of Refusal clause to allow growth within the building to align with anticipated employee footprint growth as required.
- TMX leveraged the office market climate to achieve a 20% incentive.
- To accommodate for future reconfiguration of the premises, the incentive deed provided allowance for capital upgrades.
- Achieved an under-market rate of AUD $500/sqm net.
- TMX reinstated cap and collar provision which the Landlord had removed in the renewal document.
The results
- Negotiated a 5-year lease renewal at a below market rate with a 20% incentive in a highly restricted timeframe prior to lease expiry.
- Reinstated cap and collar provision, upon market rent review.
- The current site was retained and negotiated at First Right of Refusal provision to facilitate future growth.