Those who are not very familiar with the terms of the corporate real estate market may, when faced with definitions such as rentable area, BOMA area, private area and usable area, have doubts and ask themselves: What is the difference between them? Can they make any impact on the rental value of the property?
In this short article, we will explain the difference between these areas and what real impact they can have on the rental value. In the commercial segment, understanding these concepts is extremely important, as rent negotiations in Brazil are always carried out in reais per m².
In addition, the architectural project prepared for each company needs a defined size when searching for properties.
Usable area
The usable area is defined as the sum of the carpet area (areas where workstations and meeting rooms are normally installed), wet areas (those of bathrooms, pantries and deposits), and elevator hall and building reception – if these are for the exclusive use of the occupant.
Basically, the usable area is the area where the interior design or test-fits are carried out, that is, they are those that can be occupied by people. Spaces where columns and pipes are located cannot be occupied, therefore, they are not computed as a usable area. As an example, the area below painted in yellow cannot be computed as a usable area:
Private area
The private area is the entire area for the exclusive use of the occupant. In this sense, in addition to the usable area described above, it also includes the areas of piping shafts for electrical cables, voice and data and hydraulic network, air conditioning machine rooms, in addition to the area occupied by columns and wall thickness.
There are buildings where bathrooms, shafts and air conditioning machine rooms are in the common area and are not counted as a private area.
As an example, the area below painted in yellow cannot be computed as a private area:
BOMA area
The BOMA area (Building Owners and Managers Association) includes, in addition to the private area described above, a proportion of the area of the elevator hall (even if it is shared with other occupants of the building), as well as the projection area of the staircases and covered common areas (building reception, covered gardens, auditoriums, smoking areas, etc.).
This proportion is computed according to the number of suites and floors of the occupied building. Therefore, in a building where there is a reception and a large auditorium and with a lot of common areas, the efficiency of the usable area will be lower than in buildings where there is a smaller reception without an auditorium.
The idea behind this type of measurement is to include these common areas in the extension as part of the private space. And because of this, the most modern buildings have invested in improving common areas, so that occupants have options to rest and relax.
Rentable area
And, last but not least, there is the rentable area. This is precisely the area that the landlord charges rent. The rentable area, most of the time, is over the BOMA area or over the private area; it will hardly be over the usable area.
Specifically in the city of São Paulo, until 2002, most leases were charged over the private area and little was said about the BOMA area.
Since then, the new buildings built have had more investment in the common areas. As a result, landlords chose to charge rent over the BOMA area. Nowadays, almost all Class A and A+ Corporate buildings charge rent over the BOMA area.
In the process of looking for an office, it is extremely important to know the efficiency of the usable area of each option. This will be necessary to have a fairer comparison against the actual size of the office space and the rental value.
Sometimes, even paying a more expensive rent per m² in a lease over the private area, it can be more affordable in the package at the end of the month. See the graphic below for an example:
This difference can have an impact of approximately 7% on the monthly rental amount. This comparison is normally not made by traditional real estate consultants, as they represent the landlord.
Ocupantes is the only real estate consulting company in Brazil that only represents the end user. In this way, we can openly show the real pros and cons of each building selected by the client, without any conflict of interest.
Douglas Faioli | Partner
Corporate Real Estate Director at Ocupantes, he serves corporate clients from different segments, assisting in the processes of decommissioning, expansion, relocation and renewal of assets. Serves national and multinational companies.
He lived in England for 10 years and worked as an English/Portuguese Interpreter. Graduated in English from North Devon College in England and in Real Estate from Laureate International University.
Phone: +55 11 96384-9167
E-mail: douglas.faioli@ocupantes.com.br
