Office Subleasing – What, Why, and How
Office subleasing is a practice where a tenant rents out a portion or the entirety of their leased space to a third party. It provides flexibility and financial relief for tenants who no longer need as much space or are looking to reduce costs.
Subleasing can be a strategic move for businesses looking to optimize their resources, allowing them to adjust to changing needs without breaking their original lease agreement.
The process generally involves securing permission from the landlord, finding a suitable subtenant, and creating a sublease agreement that outlines the terms and conditions of the arrangement.
Who’s Involved in Subleasing
A sublease agreement traditionally includes three parties:
- The Landlord: Typically the building owner or manager who originally leased the property. Before subleasing, tenants must obtain written permission from their landlord.
- The Tenant (or Sublandlord): The original tenant who becomes the sublandlord in the subleasing process. This party remains responsible for the terms of the original lease agreement.
- The Subtenant: The new tenant renting office space from the original tenant. The subtenant makes payments and reports any issues to the original tenant rather than the landlord.
Background on Subleasing in the Philippines
Subleasing is becoming increasingly popular in the Philippines, particularly in Metro Manila. The high cost of office spaces in prime locations has driven many companies to explore subleasing as a cost-effective alternative.
In Metro Manila, businesses in sectors like IT, BPO, and startups frequently turn to office subleasing to establish a presence in prestigious locations without committing to long-term, high-cost leases. This trend reflects a global shift towards more flexible workspaces and financial strategies.
Pros and Cons of Subleasing
Subleasing offers several advantages and disadvantages, as highlighted by Tenant CS:
Pros:
- Cost Savings: Subleasing can significantly reduce rental expenses.
- Flexibility: It allows businesses to adjust their space requirements as needed.
- Revenue Generation: For tenants with excess space, subleasing can generate additional income.
Cons:
- Limited Control: The sublandlord has less control over the subtenant compared to a direct lease.
- Landlord Approval: Securing permission from the landlord can be a complex process.
- Lease Terms: The original tenant remains responsible for the lease terms, even if the subtenant defaults.
5 Things to Note Before Subleasing
Before diving into subleasing, consider these key points:
- Landlord Approval: Ensure you have written consent from your landlord to sublease the space.
- Lease Terms: Review your lease agreement to understand the terms and conditions related to subleasing.
- Subtenant Vetting: Carefully screen potential subtenants to ensure they are reliable and financially stable.
- Clear Agreement: Draft a clear and detailed sublease agreement to avoid misunderstandings.
- Responsibilities and Liabilities: Be aware that you, as the original tenant, are still responsible for the lease obligations.
Available Offices for Sublease
Office Floors in Bonifacio One Technology Tower
- Floor Area: 1,554 sq.m. per floor
- Location: Bonifacio One Technology Tower, corner of 31st Street and Rizal Drive
- Availability: For subleasing
Features and Amenities
- Workstations:
- Capacity for over 250 agents
- 19 team leaders
- Rooms:
- Training Rooms on both floors
- Conference Rooms (12-seater and 8-seater)
- Critical Rooms for UPS and IDF
- Male & Female Nap Rooms
- Pantry with sink, cabinetry, and stockroom
- Clinic
- NOC Room
- Operational Details:
- 24×7 operation
- 100% backup power
- Network Infrastructure:
- Pre-equipped with network infrastructure
- Supported by PLDT, Globe, and Converge
Location Highlights
- Accreditation: PEZA-accredited building
- Proximity:
- Near Burgos Circle Park
- Close to St. Luke’s Medical Center BGC
- Accessibility:
- Accessible via Kalayaan Flyover to 32nd Street from Makati CBD
Designed for Productivity
- Meticulously Designed Spaces:
- Catering to dynamic and expanding workforce
- Ensuring productivity and collaboration
Office Floors in BGC Corporate Center Two
- Design: Tailored for a Fortune 500 shared services firm
- Management: Managed by Instant Group
- Sublease Terms: Available for 18 to 36 months
- Accreditation: PEZA-accredited
- Tenant: Single Fortune-500 tenant
- Building Grade: New, secure Grade A (completed in 2021)
- Location: Along 5th Avenue, BGC
Location Highlights
- Proximity:
- Located at the heart of the city’s vibrant shopping and dining block
- Directly across from Shangri-La the Fort and Bonifacio High Street Central Square
- Short walking distance to numerous dining options
- Accessibility:
- Accessible via the North Route of the BGC Bus, the district’s internal public transport system
Floor Details
10th Floor
- Floor Area: 1,419.72 sq.m.
- Workstations: 227 desks
- Pantry & Collaboration Area: 50-seat capacity
- Meeting Rooms / Executive Rooms:
- 1 x 8-pax
- 5 x 4-pax
- Conference Room: 1 x 15-pax
- Recreation Room: K-Pop Room
- Other Areas:
- 2 x 2-pax huddle rooms
- 2 soft seating booths
- Clinic
- Hub room with server rack and UPS
11th Floor
- Floor Area: 1,417.72 sq.m.
- Workstations: 227 desks
- Pantry & Collaboration Area: 50-seat capacity
- Meeting Rooms / Executive Rooms:
- 1 x 8-pax
- 5 x 4-pax
- Conference Room: 1 x 15-pax
- Recreation Room: Art Room
- Other Areas:
- 2 x 2-pax huddle rooms
- 2 soft seating booths
- Mother’s room
- Hub room with server rack and UPS
Laws on Subleasing
In the Philippines, subleasing is governed by specific legal requirements. Tenants must obtain written permission from their landlords before subleasing.
Additionally, the terms of the sublease must not contradict the original lease agreement. Failure to comply with these regulations can result in legal disputes and potential eviction.
Tenants should also ensure that the sublease agreement clearly outlines the responsibilities and rights of all parties involved to prevent any legal complications.
Contact us to learn more about how we can help you with your office subleasing journey today! You can also follow our Instagram @santosknightfrank to see more property listings to lease.
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