Commercial lease renewals are rarely straightforward. Even if you’re staying in the same building, the market conditions, your space requirements, and the terms of your lease have likely changed. Approaching a lease renewal with a clear plan and up-to-date information ensures you don’t lock into an agreement that no longer supports your business goals.
If your lease is up for renewal within the next 12–18 months, now is the time to start planning. This guide outlines what you need to watch for and how to structure your approach, whether you stay in place or consider new premises.
1. Understand the Timing and Process
Start Early
Give yourself a 12–18 month runway. This allows you time to understand your position in the market, evaluate options, conduct a stay vs go assessment, and negotiate with confidence.
Review Your Current Lease
Start with the lease you already have. Pay attention to:
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Renewal notice periods
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Rent escalation clauses
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Maintenance obligations
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Termination conditions
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Option to renew (if any)
Understanding your obligations and rights under the current agreement shapes your negotiation strategy.
2. Conduct a Stay vs Go Assessment
Before you begin negotiations, evaluate whether your current space still meets your needs. Consider:
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Does the location still work for your staff and clients?
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Is the space being used efficiently?
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Have your headcount, storage, or operational needs changed?
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Are there better options in the market at similar or better terms?
This isn’t about moving for the sake of it. It’s about making sure the space you commit to aligns with your operational and financial goals.
3. Reassess Your Space Needs
Hybrid Work Impact
Post-pandemic work patterns have shifted. Hybrid models mean many businesses need less space—or space that’s used differently. Now’s the time to evaluate:
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Desk-to-employee ratios
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Meeting room requirements
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Collaboration vs focused work zones
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Subletting opportunities
Workspace Optimization Audit
A proper audit of your space can identify inefficiencies, reduce costs, and enhance employee experience.
4. Know the Market
Current Rental Rates
Use recent data to compare your existing rent with current asking rates for comparable properties. Don’t rely on what the landlord tells you—get third-party verification.
Incentives & Tenant Installation Allowances
In many markets, landlords offer attractive incentives such as rent-free periods or tenant installation (TI) contributions. Make sure you understand what’s typical for your area and asset type.
Vacancy Rates
High vacancies in your building or area can give you leverage. Low vacancies may require a stronger business case for negotiation.
5. Negotiate With Data
Don’t Accept the First Offer
Landlords often issue a renewal proposal with escalated rent or unchanged terms. This is a starting point—not the final offer.
Use a Lease Negotiation Playbook
A strategic playbook aligns your renewal approach with your business goals. It covers:
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Your preferred lease length
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Cost benchmarks
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Market comps
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Exit clauses
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Incentive expectations
Align Terms with Business Strategy
If you plan to expand, consolidate, or restructure in the near future, make sure the lease terms allow for that flexibility.
6. Review All Clauses — Not Just the Rent
Operating Costs and Recoveries
Scrutinize what the landlord includes in “recoveries” or “common area costs.” Ensure transparency and fairness, particularly for services or facilities you don’t use.
Maintenance and Repair Clauses
Clarify who is responsible for what. Ambiguities often lead to disputes or unplanned costs down the line.
Termination & Renewal Options
If your business model is shifting, try to build in flexibility through break clauses or shorter initial lease terms with options to extend.
Assignment and Subletting Rights
Having the ability to assign or sublet can be valuable if you downsize or restructure. Don’t wait until you need this flexibility to find out you don’t have it.
7. Get Independent Representation
Avoid Direct Negotiation
While it may seem easier to negotiate directly with your landlord, this often results in a less favorable outcome. A tenant representative brings market knowledge, leverage, and experience to the table—without the emotional involvement.
Protect Your Interests
A good advisor aligns the lease terms with your business strategy, benchmarks rental rates, and handles communication with the landlord on your behalf.
Save Time and Resources
Managing lease renewals internally can drain time from your core business. Outsourcing this process gives you bandwidth to focus elsewhere while still driving optimal outcomes.
8. Factor in Fit-Outs and Technology
Tenant Improvements (TI)
If you’re staying, it may be time to upgrade your space. Consider whether your landlord will contribute to:
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Partitioning
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Lighting
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Flooring
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HVAC upgrades
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Smart office systems
Technology Requirements
Modern businesses rely on high-speed connectivity, smart access control, and workspace analytics. Confirm the building’s ability to support these.
GET QUOTES FOR OFFICE RENOVATIONS
9. Don’t Underestimate the Impact of Location
Staff Commute Times
Has traffic, public transport access, or employee preferences changed since you first moved in?
Client Accessibility
Ensure your location still supports visibility, convenience, and access for key clients or partners.
Brand Alignment
Your physical space sends a signal to clients and prospects. If your building or space no longer fits your positioning, now’s the time to change.
10. Plan for Contingencies
What If You Have to Move?
Even if you’re leaning toward staying, begin researching alternatives early. This gives you leverage in negotiations and ensures you’re not forced into last-minute decisions.
Project Management Support
If a relocation is on the cards, get experienced support. Site search, space planning, budgeting, and physical moves require project-level oversight.
11. Legal Review
Use a Lease Expert
Always have your lease reviewed by a legal advisor familiar with commercial property in your jurisdiction. Hidden pitfalls in clauses around escalation, repairs, or default can become serious liabilities.
Tailor to Local Law
South African commercial leases are governed by specific property law frameworks. Ensure your lease terms comply and protect your position.
12. Communicate with Stakeholders
Involve Internal Teams
Your finance, operations, HR, and IT departments may all have specific needs or restrictions. Include them early in the renewal process to avoid downstream conflicts.
Keep Staff Informed
If there’s a chance of relocation, keep your team informed. Transparency prevents speculation and maintains trust.
Use the Opportunity to Strengthen Your Business
Lease renewals are more than a procedural step—they’re a strategic opportunity to align your space with the future of your business. Done right, this process helps you reduce costs, improve efficiency, and set your company up for the next phase of growth.
[Download the Lease Renewal Playbook]
If you’d like to explore your options or get started with a Stay vs Go strategic report, we’re here to help. Our team handles the entire process—from benchmarking and lease negotiations to space audits and relocation support.
Don’t leave your next move to chance. Let’s talk about your lease renewal strategy and how we can help you stay, go, or renegotiate on your terms.
