{"id":1245,"date":"2025-05-19T10:49:05","date_gmt":"2025-05-19T09:49:05","guid":{"rendered":"https:\/\/www.rightmove.co.uk\/commercial-property\/news\/?p=1245"},"modified":"2025-06-26T14:30:30","modified_gmt":"2025-06-26T13:30:30","slug":"how-to-lease-a-commercial-property-a-step-by-step-guide","status":"publish","type":"post","link":"https:\/\/www.rightmove.co.uk\/commercial-property\/news\/how-to-lease-a-commercial-property-a-step-by-step-guide\/","title":{"rendered":"How to lease a commercial property: a step-by-step guide"},"content":{"rendered":"\n

During the Covid-19 pandemic and in its immediate aftermath, some businesses started to doubt the need for business premises. They found that employees could perform many tasks just as well from home and for most businesses, property represents their second biggest overhead after people.<\/p>\n\n\n\n

Of course, for companies like shops and manufacturers, property is pretty much non-negotiable, but in the last year or so many traditionally office-based businesses have started to grow weary of working from home. They’ve realised the benefits of having employees together under one roof, even if they aren\u2019t there five days a week.<\/p>\n\n\n\n

It is also true that for most companies, buying a property outright is neither feasible nor advantageous, in which case renting or leasing is inevitable. Below, we provide a step-by-step guide to finding and securing a building that is right for your business.<\/p>\n\n\n\n

Finding the right location<\/strong><\/h2>\n\n\n\n
\"Motorway<\/figure>\n\n\n\n

Businesses need to think hard about where they want to be geographically. For shops, bars and restaurants, this might be all about the footfall – about maximising the number of people who might pop in and make a purchase. For logistics businesses, proximity to the motorway network is likely to be the most important criterion. And for offices, access to good public transport and a range of amenities will be critical factors.<\/p>\n\n\n\n

It may sound counterintuitive, but locating close to the competition may be no bad thing either. The tech, life sciences and creative industries tend to cluster and find that they benefit from being around like-minded people. Think Silicon Roundabout, Cambridge and Soho, respectively. As, law firm, Bird & Bird put it: \u201cProximity to your competitors isn\u2019t always bad. It\u2019s usually for a reason, like clients being nearby, good transport connections or value for money on rent prices.\u201d<\/p>\n\n\n\n

Finding the right property<\/strong><\/h2>\n\n\n\n

Once a business has decided on a location, it can begin to focus on individual properties. An initial search can be done on Rightmove\u2019s commercial property platform<\/a>. The site lists many thousands of properties and allows users to refine their search in multiple different ways, including by size, price and the type of commercial property required.<\/p>\n\n\n\n

It may also be that companies choose to use an agent, even at this early stage, to help with initial research and due diligence. Not only do commercial agents have intimate knowledge of their \u2018patch\u2019, they also have years of experience advising clients on their property requirements and will be able to manage expectations on what is realistic within any given budget.<\/p>\n\n\n\n

\"Three<\/figure>\n\n\n\n

Many commercial agents will be members of the Royal Institution of Chartered Surveyors<\/a> (RICS) or Propertymark<\/a>. This means they are regulated and adhere to strict rules on conduct and continuing professional development.<\/p>\n\n\n\n

Negotiating a deal<\/strong><\/h2>\n\n\n\n

Taking on a lease is a big deal, involving multiple commitments. As such, it’s highly recommended that businesses take professional advice, not least from a lawyer. \u201cDon\u2019t save money by taking out a lease without seeking legal advice,\u201d says Bird & Bird.<\/p>\n\n\n\n

\u201cIt is expensive, but worth it. You\u2019ll need to factor in the costs to your budget. A lease is a legally binding contract. If either party fails to comply with the terms of the agreement, it could result in court action and\/or termination of the lease.\u201d<\/p>\n\n\n\n

The purpose of a lease is to set out the terms and conditions agreed between tenant and landlord. They tend to be very detailed and even those who have entered into previous contracts shouldn\u2019t underestimate the complexity.<\/p>\n\n\n\n

According to Bird & Bird, a lawyer can help agree the following points with the landlord:<\/p>\n\n\n\n

    \n
  1. Do you need to pay a deposit? If so, how much is it? Will it get refunded at the end of the lease term?<\/li>\n\n\n\n
  2. How will the rent be paid? Cash, cheque, PayPal, BACS?<\/li>\n\n\n\n
  3. Lease length and any break clauses<\/li>\n\n\n\n
  4. If any rent-free periods can be agreed (i.e. whilst you get the business up and running)<\/li>\n\n\n\n
  5. Rent and any rent review periods<\/li>\n\n\n\n
  6. Service, insurance and maintenance charges (the total cost, what it includes and whose responsibility it is)<\/li>\n\n\n\n
  7. When and how bills will be paid<\/li>\n\n\n\n
  8. Can the premises be sublet?<\/li>\n\n\n\n
  9. Will a third party or bank guarantee be required?<\/li>\n\n\n\n
  10. Do you have any repairing and\/or decorating obligations?<\/li>\n<\/ol>\n\n\n\n

    Energy efficiency<\/strong><\/h2>\n\n\n\n

    Energy costs are always important, but they became even more so in the last three years due to rampant energy cost inflation. Depending on what a business does, it may well be that its energy consumption is high – and so is the cost.<\/p>\n\n\n\n

    The good news is that before signing up to a lease, landlords are required to share an energy performance certificate (EPC) for the building. While they only measure the potential rather than the actual performance of a property, they are still indicative. The highest EPC rating is \u2018A\u2019.<\/p>\n\n\n\n

    In recent years, the government has set regulations for building energy efficiency. Bird & Bird advises: \u201cCurrent Minimum Energy Efficiency Standards (MEES) require that rented commercial properties have a minimum EPC rating of E. From 2028, this minimum rating will be raised to C for commercial landlords, which is then set to hit B by 2030.\u201d <\/p>\n\n\n\n

    \"Warehouse<\/figure>\n\n\n\n

    What about rent?<\/strong><\/h2>\n\n\n\n

    The lease will dictate both how much rent is due and when it’s to be paid. Unlike rent on residential properties, payments for commercial payments are usually paid quarterly. Some landlords will allow for monthly payments, but this must be clearly set out in the lease.<\/p>\n\n\n\n

    It’s also important to think about rent reviews. Almost all commercial leases will include rent reviews, in other words fixed dates, normally every three to five years, when a landlord can change the rent depending on changes in the local market.<\/p>\n\n\n\n

    \u201cThis means the amount you pay can either increase or decrease, depending on the property\u2019s market value at the time of the review,\u201d says Bird & Bird. \u201cIt is important to note that leases allow for an upwards only review. This should be specified in your rent agreement. If you choose an up-and-coming area, your rent could increase dramatically.\u201d<\/p>\n\n\n\n

    And other costs?<\/strong><\/h2>\n\n\n\n

    Many companies taking up a lease on a commercial building are surprised by quite how much business rates end up costing them. In most cases, business rates are paid by the tenant and not the landlord – and can add around 40% to the cost of renting. \u201cMake sure you ask the letting agent for the rateable value of the property before proceeding,\u201d says Bird & Bird.<\/p>\n\n\n\n

    The company adds: \u201cSometimes there are additional payments for business with a high rateable value. For example, in 2010 a 2p levy was introduced on non-domestic properties with a rateable value in excess of \u00a355,000 in London. This was to help fund the high-speed Crossrail. [On the other hand], if you have a rateable value of less than \u00a315,000, you can apply for exemptions to paying business rates and extra fees by claiming \u2018small business relief\u2019.\u201d<\/p>\n\n\n\n

    In addition, Bird & Bird lists other costs that need to be budgeted for:<\/p>\n\n\n\n