How To Distinguish Between Gross Area And Net Area
When looking through some quotations from office buildings, there will be times when you come across the terms “GROSS” and “NET ” area, do you wonder what these two are and how are they different? how are each other?
1. CHARACTERISTICS OF GROSS AREA WHEN RENTING OFFICES
Gross area is a way to calculate the office rental space, including space where the tenants can work, plus the outside area used for common use such as corridors, shared toilets, aisles. in return, hall, elevator … (will also be included in the total office space by the investor).
This calculation is often applied in Grade A office buildings to maximize profits, ensuring that any space, including the public spaces, can be leased.
2. CHARACTERISTICS OF NET AREA WHEN RENTING OFFICE
NET area is also the actual space that you rent an office for your work and profession. NET area is calculated with the separate compartment space, excluding the lobby, corridor, WC as well as public spaces in the building. Particularly for some buildings, the NET area may include the space of the pillars on the floor.
In other words, the NET area is the net space that the tenant actually uses. This calculation method you will often encounter when in most Grade B and C office buildings for rent.
3. GENERAL CONCLUSION FOR 2 TYPES OF OFFICE LEASE AREA
The difference between Gross and Net area will directly affect the final cost that you have to pay when renting an office. Or to put it more simply, with the Gross area calculation, you will have to pay about 20-30% more for the common space that is not on your office premises.
It is possible to temporarily calculate the GROSS office space according to NET by multiplying the NET area by 1.2 and 1.4 (Note that each building will have a different calculation method)
The actual survey shows that when leasing offices, individuals, businesses, or companies often prefer the rent based on the NET area because on the contract that is the space they use, helping them feel not waste money on the space used for common use, the public space that many other individuals, companies, and businesses are using the same way.
When renting an office, you may find it looks cheap, but after negotiating and adding all fees, you will feel that they are no longer cheap.
Therefore, you need to be knowledgeable about the price structure, taxes, and fees such as management fees (in some places called service fees), overtime fees, payment policies, deposits as well as incentives that customers receive. rent can take advantage.
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