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December 24, 2025
Joe Averill
5 mins
Despite the rise of serviced and managed offices, many companies still sign long-term leases in Manchester. On the surface, the appeal is clear. A lease offers stability, control, and the chance to design a space around your company’s unique needs. Rents are often quoted at a lower price per square foot compared to serviced or managed alternatives. For some executives, especially those used to traditional corporate real estate, long leases feel like the “serious” option.
Yet the decision is not as straightforward as it looks. While the headline rent can appear attractive, a long-term lease often carries hidden costs that accumulate over time. For CFOs, COOs, and facilities directors, these can have a significant impact on budgets and operations.
When evaluating a lease, it helps to separate visible costs from those that are less obvious.
These are the numbers that show up in the contract. They include the base rent, business rates payable to the local authority, and insurance. For many decision-makers, these figures create the initial impression that a lease is cost-effective compared to other models.
Beyond the visible numbers lies a series of expenses that can quickly increase the total cost of occupancy. Service charges are one of the most common. Landlords often pass on the costs of maintaining shared areas, lifts, security, or landscaping. These charges can rise annually and are difficult to forecast.
Maintenance and repairs are another area. In a leased office, the tenant is often responsible for keeping the space in good order, including heating, cooling, plumbing, and electrical systems. Unexpected breakdowns can lead to large, unplanned bills.
When signing a lease, most companies need to invest heavily upfront. A fit-out is required to make the office suitable for use, including partition walls, lighting, flooring, and often the installation of data cabling and IT infrastructure. Furniture and design add further costs. These expenses can run into hundreds of thousands of pounds before a single employee sets foot in the building.
Over the length of a five or ten-year lease, inflation impacts utility bills and service costs. What looked affordable at the start can become a strain as energy prices and interest rates fluctuate. Predicting these costs years in advance is extremely challenging.
One of the most underestimated costs of a lease is dilapidations. At the end of a lease, tenants are often required to return the space to its original condition. This might mean stripping out fit-outs, replacing flooring, or redecorating.
For large offices, dilapidation bills can reach six figures. Many companies only realise this obligation at the end of their contract, creating sudden financial pressure. Unlike serviced or managed offices where the operator handles maintenance, tenants in leased spaces are responsible for restoring the property.
The financial side is only part of the challenge. Long-term leases introduce operational risks that can impact growth, culture, and efficiency.
Businesses rarely grow in a straight line. Some expand quickly, while others shrink or restructure. With a long-term lease, scaling up may require expensive additional space or even relocating. Downsizing is equally difficult, as tenants are often stuck paying for space they no longer need.
Hybrid working has changed office usage. In many companies, employees now spend part of their week at home. Leased offices often sit partially empty, leaving companies paying full price for half-used space.
While some leases allow subletting, finding a suitable subtenant can take months. Market conditions may also mean subletting is not financially attractive. This leaves companies exposed to ongoing costs with little flexibility to adapt.
To illustrate how hidden costs play out, consider three examples from the Manchester market.
A mid-sized firm in Spinningfields signed a ten-year lease. After five years, they faced a £200,000 maintenance bill when the HVAC system failed. Because the lease placed responsibility on the tenant, the cost fell entirely on the business.
A startup signed a five-year lease on King Street. After two years of rapid growth, their headcount had doubled, and the space no longer fit. Relocating early meant paying significant penalties to break the contract, eroding much of their early profit.
A professional services company faced a dilapidations bill of £150,000 when leaving a property near Deansgate. The cost of stripping out partitions, repainting, and restoring ceilings came as a shock to leadership, who had not budgeted for it.
The good news is that alternatives exist.
Serviced offices remove most hidden costs by bundling expenses into one monthly fee. Rent includes utilities, maintenance, furniture, and even amenities such as reception staff or shared meeting rooms. For CFOs, this creates predictable budgets.
Managed offices offer a compromise. They allow businesses to design and brand their space while keeping contracts shorter and more flexible. Many costs that would fall to the tenant in a leased office are included in the monthly payment.
Shorter flexible leases are also emerging as a middle ground. Some landlords now offer three-year terms with more adaptable conditions, although they still lack the full-service benefits of managed or serviced spaces.
Every executive has a different perspective on the office decision.
CFOs must evaluate the total cost of occupancy, not just the headline rent. This includes fit-out, service charges, maintenance, and dilapidations. Predictability is often more valuable than a low initial figure.
Long leases increase operational complexity. Facilities teams are responsible for repairs, vendor management, and compliance. Managed or serviced offices simplify these tasks by centralising responsibility with the operator.
CEOs must consider how office commitments align with growth strategies. Locking into a ten-year deal can restrict agility in a fast-moving market. A serviced or managed office keeps options open as the business evolves.
The office plays a vital role in culture and talent attraction. Long leases may limit the ability to upgrade amenities or adapt to hybrid working needs. Serviced and managed offices often provide access to features like wellness suites or social spaces that enhance employee experience.
The market is shifting. Fewer businesses are committing to ten-year leases. Instead, demand is rising for spaces that provide flexibility, ESG credentials, and predictable costs.
Landlords are responding by offering shorter lease options or repurposing buildings into serviced and managed spaces. In Manchester, many new developments prioritise sustainability and flexibility over traditional leasing models.
Over the next decade, companies that lock into inflexible leases may find themselves at a disadvantage. Those that embrace flexibility will be better positioned to adapt to economic shifts, regulatory changes, and evolving employee expectations.
· Long-term leases may look affordable at first but often carry hidden costs.
· Service charges, maintenance, capital expenditure, and dilapidations can add significant unplanned expenses.
· Hybrid working makes it harder to justify paying for underutilised leased space.
· Serviced and managed offices provide alternatives that reduce risk and improve cost certainty.
· Executives must consider total cost of occupancy, operational complexity, and employee experience when evaluating leases.
For Manchester businesses, the decision between a long-term lease and a flexible alternative is no longer purely financial. It is strategic. Hidden costs can undermine budgets, while inflexible commitments can restrict growth. By evaluating the full picture — not just the headline rent — executives can make smarter decisions that protect both finances and culture.
Want to find your next leased, managed or serviced office space to rent? Book a call with our team today.
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