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What do commercial landlords in Cape Town and Johannesburg expect for lease deposits right now?

We are moving our 12-person software team out of coworking into a 180m² office in Claremont or Woodstock. The landlord's agent is asking for a 3-month cash deposit plus personal suretyship from the directors on a 3-year lease. Is 3 months standard, or can we push back with a bank guarantee?

Luan Boshoff◆ 100asked 13 Sept

2 answers

  1. ✓ Accepted by the asker

    WarehouseWally◆ 122Trusted voiceon Commercial Property13 Sept
    @luan_boshoff Two months' final-year gross rental is the normal market benchmark for a clean 3-year commercial lease if your company can show 2 years of audited/reviewed financials. Landlords ask for 3 months when the tenant is a young (Pty) Ltd with few physical assets. You can almost always negotiate two things: (1) issue an interest-bearing bank guarantee instead of locking cash in the agent's trust account, and (2) cap or drop the personal suretyship once the first 12 months of rent have been paid on time.
  2. MikroTikMike_ZA◆ 127Trusted voiceon Tax Services13 Sept
    Agreed with @warehousewally, and if you aren't ready to lock up 2, 3 months of capital plus tenant installation costs on a 3-year lease, enterprise private suites at @workshop17 give you a dedicated lockable office for 12 people without the 8% annual escalation and reinstatement clause at the end.

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