In more than two decades designing workplaces, I've watched good businesses realise too late that their office lease is expiring, discovering they have too little runway to make, let alone implement an accommodation strategy that will set them up for success in the coming years. A lease renewal is one of those rare moments when cost, culture and flexibility can all be reset in a single move, but only when begun early enough. Here's how to use that window before it closes.
Author: Alasdair Hood, Principal - Head of Design, Context Architects
Outline
Why a lease expiry matters more than people think
"Just renew" is a decision, not a default
Four questions leadership should ask early
Hidden lease clauses worth reading now
How hybrid work redefined what contemporary workplaces require
A month-by-month timeline for the year
What to do this quarter
Key Takeaways
A lease expiry is not an administrative renewal date. It is a rare, once-every-few-years window to reset how your workplace supports your business — and the decisions that matter most are made eight to twelve months out.
The best lease decisions are made 8-12 months out
Renewing by default still locks in cost
Make-good clauses are a real, hidden liability
Hybrid work has changed how much space you need
Weigh renew, relocate and redesign together
Early planning preserves leverage and lowers stress
Read your reinstatement clause before your final quarter
Introduction
A lease expiry is one of the few moments when an established business can reset three things at once: what it pays for space, how well that space supports the way people actually work, and how much risk it carries at the end of the term. The closer a renewal deadline looms, the fewer the options likely to be available.
This guide covers what to examine while you still have time to act, from the clauses in your current lease to the questions a leadership team should be asking now.
Why "just renew" is a decision, not a default
Under the standard Deed of Lease used across most New Zealand commercial tenancies, a tenant exercising a right of renewal usually must give written notice at least three calendar months before the term ends, but three months is a legal deadline, not a planning window.
If relocating is a likely option, there are several steps that should be considered well before notice is given: market search, shortlist, test fits to confirm suitability, lease negotiation, design, consent, procurement, construction, the move itself, and making good the premises you are leaving.
So, if the renewal deadline is the first time you examine the question seriously, it’s already too late. Renewal may well be the right answer, but it should be chosen with visibility of all the options available.
Four questions your leadership team should answer 10 to 12 months out
1. Does our current space still fit how we actually work? This should be based on evidence, not subjective views. Analyse desk occupancy over a full fortnight, note peaks, track meeting room utilisation.
2. What will it cost us to leave? The exit cost, including make-good obligations, are written into your current lease, and can be easily overlooked when budgeting a move elsewhere.
3. How much flexibility do we need over the next two to five years? If headcount could plausibly move 30% in either direction, alternative accommodation should be seriously considered.
4. What is the whole-of-term cost for each option? This includes not just rent but outgoings, the cost of a fitout, and the exit obligations, across the full term. JLL benchmarks a moderate Auckland office fitout at around NZ$3,200 per square metre, which puts a 400 square metre workplace near NZ$1.3 million before a dollar of rent is paid (JLL Australia and New Zealand Fit-Out Cost Guide 2026).
It’s also worth an early conversation with your accountant. From 1 April 2024 the depreciation rate for commercial buildings in New Zealand was set to 0%, while separately identifiable fitout can still be depreciable (Inland Revenue, Depreciation). How a workplace is designed and documented now carries a financial consequence it didn’t a few years ago.
The clauses in your current lease worth reading this week
Two dates and one clause. Find the exact expiry date, find the renewal notice deadline, and then check your reinstatement obligations.
Reinstatement, usually called "make-good", is the requirement (unless negotiated otherwise) to hand the premises back in the condition it was in at the start of the lease. Under the widely used standard lease, that generally means the tenant returning the premises in the same clean order, repair and condition as at the start of the term, including removing chattels, additions and alterations made during the tenancy, at the tenant's cost. If this is not done, the landlord can carry out the work and recover the cost from the tenant or their guarantor (Franklin Law, reinstatement obligations under a commercial lease).
How hybrid work changed what "enough space" means
New Zealand offices run at an average utilisation rate of 64%, which is well ahead of Australia at 52% and the Americas at 51%, but still means roughly a third of the floor you pay for is underutilised. That 64% equates to about three days a week, while employer expectations lean towards four (CBRE New Zealand Office Occupier Sentiment Survey 2025).
Analysis of office use, understanding what your peaks look like, how well your shared amenities are utilised and whether the space earns your employee’s commute should paint a clear picture of what’s required for future success.
A simple month-by-month timeline for the year ahead
12 to 10 months out: Confirm the expiry and notice dates. Read the lease, including reinstatement. Agree whether you will test the market or negotiate a renewal.
10 to 8 months out: Gather occupancy evidence. Write a short workplace brief covering headcount, work patterns, growth assumptions and budget.
8 to 6 months out: Search the market, shortlist buildings and obtain test fits so you can be certain of the right fit before committing. If relocating, negotiate the lease. Appoint your design partner, develop the design for the new premises, establish the consent pathway and a procurement approach. If the decision is to remain where you are, keep an eye on the lease renewal date.
4 to 1 months out: Build, coordinate services and IT, and scope the make-good on your outgoing premises. Prepare your people for the move.
Move month: Relocate, complete handover, and address make-good obligations at the out-going premises.
Common questions about lease expiry planning
How early should we begin planning for an office lease expiry? Ten to twelve months out. That allows time to evaluate options, search the market, negotiate, design and build without unduly limiting the available options.
What is a make-good clause? The lease obligation requiring a tenant to return premises to their original condition at the end of the term, usually including removal of fitout and alterations, at the tenant's expense.
Is renewing always cheaper than relocating? Not necessarily. A renewal avoids moving costs but can lock in an oversized footprint for another term. Compare both on whole-of-term cost.
Next Steps
Review your current lease this week and check: the expiry date and the reinstatement or make-good clause. Then, using data rather than subjective measures, assess whether your current still appropriately supports how your business actually works?
If you would like a straight-forward breakdown of what a make-good clause could cost at exit, our next guide works through the numbers for finance leaders.
You can also browse our workplace portfolio or read more of our thinking in Context Insights.
Jump to the other blogs in this series here:
Part 2: The Real Cost of an Office Fitout: A CFO’s Guide to Whole-of-Lease Thinking
Part 5: After the Move: How to Make Your New Workplace Keep Paying Off - Context NZ
About the Author:
Alasdair Hood, Principal - Head of Design, Context Architects
Alasdair Hood is a Design Principal at Context Architects, where he leads commercial workplace design across the practice's New Zealand studios. An award-winning designer, Alasdair has spent more than two decades helping organisations rethink how their physical space supports the way people actually work.
Alasdair specialises in translating a company's culture, headcount and growth plans into workplaces that are flexible, cost-efficient and built for change, drawing on Context's Adaptive Modular Design approach to reduce fitout cost, cut make-good liability and keep options open.
He writes regularly on the future of work and the evolving New Zealand workplace. Connect with Alasdair on LinkedIn, or explore Context Architects' workplace thinking through their Insights.