Corporate & Business · Property & Facilities
A lease review that stopped at the rental rate would have missed most of the cost
One functional site held under three separate instruments created over seven years. Rent was only part of the position: municipal charges, parking, automatic renewal, notice periods and a contractual 10% escalation all shaped what the premises really cost and what could be changed.
- 3
- linked lease instruments
- 2,025 m²
- existing footprint modelled
- 10% → 5%
- negotiated annual escalation
- 10.7%
- strongest stay-option model
Proof context: An established multi-unit corporate site with laboratory operations
The situation
One site, three leases, and a cost nobody could see whole
The organisation occupied one functional corporate site through three linked lease instruments created at different times. Rent was only one part of the commercial position. Municipal charges, parking, automatic renewal, notice periods, deposits, contractual escalation and specialist operational requirements all affected the true cost and risk of remaining in the premises.
The governing lease provided for automatic annual renewal and a contractual rental escalation of 10% a year, while live invoicing appeared to be escalating at materially lower rates. That created an important distinction between what was being billed and what the agreement actually permitted.
What KuTh did
Reconstruct the position before negotiating any part of it
The negotiation was not limited to rent per square metre. It addressed the whole occupancy-cost structure, the term, the escalation mechanism and the practical requirements of moving specialist laboratory operations.
- Reconstructed the leases. The original lease and its later addenda were abstracted into one usable commercial position covering commencement and renewal dates, rent, escalation, deposits, municipal contributions, parking, notice requirements and how the instruments interact.
- Reconciled contract to invoice. The contractual terms were tested against live billing, separating what the landlord was charging from what the agreement allowed the landlord to charge.
- Modelled total occupancy cost. Rent, municipal cost, open parking and covered parking were treated as one cost stack rather than a rental rate with extras attached.
- Benchmarked the market. Comparable arrangements, including a same-office-park comparator, established whether each component remained commercially defensible and created an external basis for negotiation.
- Built alternatives. Stay and expansion scenarios were developed so the organisation had defined routes to choose between rather than a single counter-offer to accept or refuse.
The result
Three negotiated decision routes
Scroll table sideways →
| Route | First-year cost index | Modelled improvement |
|---|---|---|
| Retain existing footprint — three years | 93.0 | 7.0% |
| Retain existing footprint — five years | 89.3 | 10.7% |
| Move to larger premises — 3,000 m² | Not comparable | 48.1% more space, lower rent per m² |
Indexed against a baseline of 100.0 for the current stated annual occupancy components. The contractual renewal escalation was reduced from 10% to 5% in the negotiated alternatives. The growth route also carried three months' rent-free occupation and space-planning support to facilitate laboratory relocation.
Why it worked
The result did not come from one headline rental discount
The five-year route illustrates the point. A 9.7% reduction in rent per square metre arrived alongside an 18.0% reduction in the municipal-cost input, a 12.1% reduction in covered-parking rates and the halving of contractual annual escalation from 10% to 5%.
That is materially different from asking a landlord for a lower rent. The larger premises are a further example: more total cost, but 48.1% more space on improved unit economics — a capacity decision rather than a saving, and presented that way.
Evidence and publication boundary
Published as negotiated and modelled outcomes. The engagement record establishes that the property position was reconstructed, alternatives were negotiated and the rationalisation was completed. It does not contain the signed replacement lease, the option-selection approval or a post-implementation invoice series, so these figures are not described as realised or implemented savings.
Financial results are presented as percentages and indexed values. Rent values, the property address, the landlord’s identity and other commercially sensitive information are excluded. A historic savings-per-annum calculation in the original working material did not reconcile against the recorded annual cost components; it has been set aside and the recalculated index used instead.
Supporting documents