How Much Do London Office Finder Fees Really Cost?

In my last blog  –  Should you pay an office finder fee in today’s digital world? – I promised to write a follow up to tell you how much a London office finder will charge to help you secure a new office and negotiate the best commercial terms on your lease. Let’s get straight to it – because how much do London office finder fees really cost is a question we’re asked all the time.

First, a bit of context

• We’re talking here about the longer-term leased office market – where there’s plenty to negotiate with landlords. (I’ll mention flexible serviced office space towards the end)
• As with many industries, agents may charge a range of fees , but that’s not particularly helpful…
• And please don’t confuse the office finding agent (working for you, the tenant) with the landlord’s letting agent (working for the landlord). One helps you negotiate against the other.

So how much do they actually charge?

A pretty standard fee is 10% of one year’s rent – excluding business rates, service charge, and any letting incentives your agent negotiates in your favour. In other words, 10% of one year’s net rent .

Example scenarios:

• If your agent negotiates a lease at £150,000 per annum → Fee = £15,000
• For a smaller office at £75,000 → Fee = £7,500
• For a larger space at £250,000 → Fee = £25,000

What do they do for that fee?

If you put your trust in a good single agent, they’ll guide you through the entire process:

• Help you define your search parameters
• Thoroughly research the market and flag all suitable options
• Assist with shortlisting
• Arrange and accompany you on inspections
• Help you select the best property
• Negotiate the best commercial terms
• Support you through the legal process – working closely with your solicitor

Does value pass?

Over and above all the legwork – shortlisting, inspections, coordination – your agent’s real value comes in negotiating the commercial terms of your new office lease.

Let’s say your lease is £150,000 per annum. That’s £12,500 per month. If your agent negotiates just two months rent-free beyond what you’d have secured alone, you’ve already saved £25,000 – more than covering the cost of their office finders fee.

And there are plenty of other terms on the office lease they’ll help you negotiate:

• Annual rent
• Landlord’s fit-out works
• Service charge cap
• Tenant break options
• Subletting rights
• Who maintains the air con
• End-of-lease dilapidations

You’ll be negotiating with a professional landlord and their agent. Having your own agent levels the playing field.

So – how much do London office finder fees really cost?

In our experience, 10% of one year’s net rent is a solid rule of thumb. And the return on investment can be significant – not just in financial terms, but in time saved and outcomes achieved.

A note on serviced office finders

In the serviced / flex office market , the model is different. Finders (brokers) are usually paid by the office operator, not the tenant . So you typically don’t pay a fee at all.

However, even here, online searches rarely show every option, so a good broker can help you see the full picture.

Final thoughts

In my opinion, if you don’t have an agent fighting your corner, you are unlikely to be able to negotiate with the landlord and their agents on an equal footing and the cost of this could be far greater than the office finder’s fees. You can find out how to choose the best office agent in this blog post from my colleague Michael Fraser.

Some caveats

• The 10% rule is a good guide, but it’s typically applied to rents between £50,000 and £250,000 .For lower rents, agents may request a minimum fee . For higher rents, tenants should look to negotiate a cap .
• Some office finders prefer to base their fees on the savings they negotiate. That can align interests well, but it’s still wise to agree a cap – ideally not too far from 10% of annual rent .
• In the flexible / serviced office market , as noted above, it’s standard for finders to be paid by the operator , not the occupier.