Start with the complete picture
Rent, business rates and service charge form the recurring base. Rent-free periods, landlord contributions and stepped rents then change the effective cost over the term.
Fit-out, furniture, professional fees, deposits, guarantees and eventual dilapidations can be just as important. They must be included when fitted, Cat A and managed offices are being compared.
- Headline rent
- Rates and service charge
- Incentives and capital cost
- Exit liabilities
Compare like with like
A fully fitted office may carry a higher rent but require far less capital and management time. A lower-rent Cat A floor may look attractive until the fit-out budget and programme are included.
Managed space can provide speed and flexibility, but its bundled price should be tested against a conventional lease over the same period. Flexibility has value, but it should still be priced clearly.
Make the decision usable
The most useful output is a monthly all-in figure and a net effective rent, supported by clear assumptions. Decision-makers can then see the real difference between options rather than comparing incompatible headline numbers.
The comparison should also show when cash is required. A lower long-term cost may still create a heavier initial capital requirement, which can change the right answer for the business.