Commercial property represents huge business in the UK, with this borne out by figures published in 2017. During 2016, the total value of commercial property was estimated at £883 billion, despite a slight drop being reported on the previous years’ figures.
Given this and the fact that some business-owners regularly have to commit to extended lease agreements, it’s little wonder that companies are often torn between relocating or refurbishing their existing premises at a reduced cost.
However, it’s important to adopt an informed outlook and consider several different factors before making a final decision. Here are some of the key considerations to keep in mind:
1. Can Refurbishment Help you to Remain in Line with your Growth Plans?
From a purely financial perspective, there’s no doubt that an office fit out and refurbishment often represents the ideal choice for business owners.
However, this may not be the case when you take into account your short and mid-term growth plans. After all, if you expect your company to experience exponential growth in the next five years, it may prove impossible to refurbish an existing workspace in a bid to keep pace with this.
In instances where you expect your firm to scale slowly but steadily during the same period, however, it may be possible to liaise with property experts and remodel your premises in a bid to optimise its level of office occupancy.
With this in mind, the key is to consider your forecasted growth and understand the precise demands that this will place on your workplace, whilst engaging industry experts to factor in the impact of agile working and similar concepts.
2. The Cost of Relocating
Another key consideration is your company’s financial budget, as the additional costs associated with relocating may make this a fanciful and largely unattainable option.
These costs can accumulate quickly in instances where you have to buy your way out of an existing lease, particularly when you’re also required to secure a brand new agreement before completing a move.
You’ll also have to factor in moving costs, as packing up and transporting your firm’s assets (where applicable) can account for a huge portion of your budget. In some instances, you may also have to take on the relocation costs for key stakeholders and employees, or invest in replacement staff members in some instances.
So, it’s important to retain a clear understanding of your budget at all times and make key decisions with this firmly in mind.
3. Your Ability to Attract Talent
The issue of replacing staff members in the event of relocating is an interesting one, particularly as the cost of recruiting new talent is up to five times more expensive than retaining existing employees.
However, if you decide that your business is in need of fresh blood, it may be necessary to relocate in instances where your premises are located in a relatively remote area with poor transportation links.
Make no mistake; this can have a critical bearing on your ability to attract the top talent in your industry, which can, in turn, hinder the business’s growth potential in the short and medium-term.
Ultimately, it’s far better to maintain a business venture with a low turnover of staff, so you’ll need to determine whether relocation is capable of delivering a return on the requisite financial and human investment.