When calculating expenses for renting office space, businesses might forget to take extra costs in rental office consideration. While monthly rent is the biggest expense, it’s crucial to think about other costs like utilities, maintenance fees, internet, and phone services, as well as costs for shared amenities like meeting rooms and kitchenettes. You may also encounter charges for parking, office cleaning, or even security services.
We suggest estimating both optional and non-negotiable costs carefully. Before checking out your preferred offices, ask the real estate agent about any non-negotiable additional expenses. Make sure to clarify all associated costs with your landlord to get a full picture of your total monthly outlay.
While many aspects of an office rent agreement can be negotiated, some will have fixed fees.
Maintenance fee: These costs apply when renting office in a business center or office building. They usually cover lift and air conditioning maintenance, cleaning of shared areas, façade and window cleaning, security/reception services, and parking maintenance (if applicable). Typically shared among tenants, these costs are usually paid alongside rent. Prices can vary, ranging from €15/sqm per year to €50/sqm per year for newer, high-end commercial projects.
Utilities: Water, electricity, and internet costs are consumption-dependent and are paid by the tenant along with rent or through bills issued by ARMS to the lessor.
VAT: Most landlords charge VAT in addition to the monthly rent. Depending on your business’s industry, this fee may be offsettable. Otherwise, VAT on commercial property rent in Malta is 18%.
Agency fee: This fee is paid to the agency for locating the rental office. It amounts to 10% of the annual rent plus VAT. Both the lessor and lessee are responsible for this fee upon signing the office space rental agreement.
Parking: If the office space includes parking, there might be extra monthly charges for these spots. In Malta, parking fees typically range from €800 to €1,500 per year per parking space.
Furniture: If the rental office isn’t furnished, buying office furniture can be pricey and time consuming. It’s important to plan accordingly. Consider asking the landlord about the possibility of using pre-owned office furniture to save costs. Otherwise, you’ll need to buy new furniture.
Insurance: The landlord should have property insurance covering the exterior and structure of the property. As a tenant, you’ll need a separate property insurance policy covering the rented unit.
Alterations and Finishes: If you want to customise the rental property, like adding finishes or altering the layout, the agreement should clarify who will do the work and cover the expenses. It should also mention if you’ll have a grace period (rent-free) to complete the alterations. Typically, the landlord handles basic fittings like flooring and HVAC systems, while the tenant is responsible for cabling and furnishing. If you agree to customise the property, the agreement should also outline conditions for returning the property to its original state.
Moving Costs: Don’t forget to get estimates for moving your office to the new location.
Looking for an office in Malta? We’re here to help! Reach out to us via email at info@officemarket.mt or give us a call at +356 7949 5969.
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