Level Three - Example One (City of London)

Question 1

What is the difference between serviced office space and managed office space?

Answer 1

Serviced office is a traditional coworking type building, acquire office space on a licence agreement where you have access to amenities throughout the buildings (won’t have kitchens etc in your office space) such as meeting rooms and gym, terraces etc.

Managed office is more comparable to a conventional lease which is typically agreed on a short form lease basis, so more flexible than a conventional lease but have your own meeting rooms and kitchen etc (typically will have your own floor). Although you will get amenities such as internet, cleaning and maintenance paying one of all inclusive rent.

Question 2

What were vacancy rates and prime rents at the time?

Answer 2

8%
£80.00 psf

Question 3

You mentioned you carried out a financial analysis, what did you include in this?

Answer 3

• Rents
• Service Charge
• Business Rates
• Rent free
• Dilapidations (£25.00 psf)
• SDLT

Question 4

Who do you pay Business Rates to?

Answer 4

VOA

Question 5

What are the SDTL thresholds?

Answer 5

Net present value of rent SDLT rate
£0 to £150,000 Zero
The portion from £150,001 to £5,000,000 1%
The portion above £5,000,000 2%

Question 6

Was the lease that you negotiated inside or outside the Act?

Answer 6

Outside the act

Question 7

What is the benefit of having your lease inside the Act?

Answer 7

Right to renew

Question 8

How easy is it to have a lease inside the Act?

Answer 8

Generally uncommon.
Will only really find it for leases longer than 10 years.

Question 9

How do you document a lease that is outside the Act?

Answer 9

Statutory declaration that confirms it will be outside the Act. Needs to be signed by a UK director on the same day of lease completion.

Question 10

How did you advise your client on the submarkets and leasing options?

Answer 10

I explained the differences between prime and secondary submarkets in Central London, highlighting how these affect rent levels and availability. I also discussed the pros and cons of conventional leases versus serviced or managed office options, particularly in terms of flexibility, cost, and lease terms.

Question 11

What factors led your client to choose a conventional lease over a serviced option?

Answer 11

• Wanted a bit more security
• Preferred the options we showed them
• Could make their space more of their own
• Exclusive use over the space