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Property Cost and Benefit Matrix

What should you consider if you are looking for new office accommodation? You probably know how much space you need, at least roughly, based on the number of staff who will be based in the office, desk share policies, densities and other facilities you need.

You have probably also assessed, to a greater or lesser extent, the ideal location for your new property and the style and quality. All of these factors help narrow down the search, but it is still likely that a search will result in up to ten properties on your shortlist, that can be reduced to three or five serious contenders.

At the start of the search process, there may not be exactly the right property available, with each property having individual advantages and disadvantages. A good way (although not totally scientific) of setting one over the rest is to score the properties on a set of criteria. You chose the criteria and the weighting methods (say score each out of 10, or for more important criteria allow a maximum of 15 or 20 points), depending on the factors that are important, but for example the criteria could be:

  • Location
  • Size
  • Cost 
  • Image / Qualitiy 
  • Amenities 
  • Parking / Transport Links

This will give a matrix that can help order each property on the shortlist. However the process is capable of manipulation, both by the maximum score possible for each category and the way each property is rated. What it does tend to show is the most popular property when assessed honestly by a committee (even a committee of one or two!)

A cost analysis can provide a more scientific comparison, however t is important to assess the specific leas implications such as lease length, break penalties, fit out and dilapidations costs as well as rent and taxes. If each property is available on similar terms for the same lease length this is much easier; if not a Net Present Value comparison should be undertaken for each property / lease commitment that will give you an average annual cost, both in terms of the total commitment and on a pro rata basis.

You may well find that the most favoured property under the matrix analysis does not provide the best value on a pure cost analysis basis, but this could then be the basis of some hard financial negotiations!

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