Additional Office Lease Costs Beyond Rent

When companies begin estimating costs associated with a new rental office, it is easy to overlook additional office lease costs. While monthly rent will indeed be the largest expenditure, it is important to consider not only the monthly rent but also additional costs such as utilities, maintenance fees, and parking fees.

We recommend you carefully estimate both optional and non-negotiable costs and inquire with the real estate agent about the non-negotiable additional costs before viewing your preferred options.

 

Non-Negotiable Additional Office Rent Costs

While many parts of a lease agreement can be negotiable, some will have fixed fees.

  • Maintenance fee: These costs are applicable when renting a private or shared office in a business center or office building. They include lift maintenance, air conditioning maintenance, cleaning of communal areas, cleaning of the façade and windows, security/reception service, and car park maintenance (if applicable). These costs are usually shared among the tenants of the building and are typically paid with the rent. Costs can range from €15/sqm per year at the lower end to up to €50/sqm per year for new, high-end commercial projects.

  • Utilities: Water, electricity, and internet costs depend on consumption and are paid by the tenant with the rent or through bills issued by ARMS to the lessor.

  • VAT: Most landlords charge a VAT fee in addition to the monthly rent. Depending on the industry of your business, this fee may be offset. If not, VAT on commercial property rent in Malta is 18%.

  • Agency fee: This fee is paid to the agency for services provided in finding the rental office. The fee is 10% of the annual rent plus VAT. Both the lessor and lessee must pay this fee after signing the rental agreement.

     
     

Optional Additional Office Space Rent Costs In Malta

  • Parking: If an office space offers parking spaces, you may incur additional monthly fees if you opt for these options. In Malta, parking fees average €800 to €1,500 per year per parking space.

  • Furniture: Unless renting a furnished office, office furniture can be quite expensive, so it’s crucial to budget accurately. It is recommended to approach the landlord to inquire about the possibility of offering used office furniture. Otherwise, you may need to purchase new furniture.

     

  • Insurance: The lessor must have a property insurance policy covering the exterior and structure of the property in place. The lessee must have a property insurance policy covering the rental unit.

  • Alterations and Finishes: If the tenant desires to finish a rental property to a certain standard, the agreement must stipulate who is willing to undertake the works and expenses. It should also specify whether the tenant will be granted some grace period (rent-free) to complete the property. If the property is still in a shell state, the lessor is usually responsible for basic fittings such as flooring, soffits/ceiling, HVAC systems, electrical wiring, plumbing, etc. However, the tenant is generally responsible for cabling and furnishing the property. If parties agree for a tenant to finish the property, the agreement must stipulate conditions under which the property must be reverted.

  • Moving Costs: Make sure to obtain quotes for the cost of moving your office to the new building.

Office Hunting in Malta? We’ve Got Your Back! Contact us via email at info@officemarkelt.mt or by phone at +356 7949 5969.