Office-Space-Guide-Four

WHAT IS "RENT"?

In general terms, there are two the rent for your office space can be structures:

1. A gross rent; and

2. A net rent.

Fivex Property Group prefers gross rents for office space because a gross rent is the total
rent you pay on an annual basis. We often include a clause in the lease that you also pay an
increase in outgoings over base year which is usually a nominal sum of money
acknowledging that the outgoings for office buildings tend to grow faster than inflation or a
fixed increase predominantly due to State Government taxes, levies and charges.

Some landlords prefer net rents for office space. A net rent obligates you to pay a rental
component for the office space as well as your fair share of the office building's outgoings. A
net rent is fair in that building outgoings are the recurrent costs incurred in maintaining an
office building and it is in your interests to ensure the commercial property is well
maintained, however, net rents can be confusing because it is harder to determine precisely
what your total rent in any annual period will be. Further, net rents are more comples to
administer. In shopping centre leases, net rents are the norm, however, from our experience
net rents are the exception in office leases.