Explains some of the common terms used in property planning, leasing, delivery and management.
The way rent and building costs are charged can vary in different lease types. Different lease documents may itemise expenses differently and may use variations of this terminology.
An agreement to lease sets out the terms and conditions under which a landlord and tenant agree to enter into a future lease. It is commonly used when agreed commercial terms are in place, but certain conditions must be satisfied before occupation – such as landlord works, regulatory approvals, or tenant fitout. The ATL records the key lease terms, outlines required works and responsibilities, sets timeframes for meeting conditions, and details what happens if delays or variations happen. Once all conditions are satisfied, the parties are required to enter into a formal Deed of Lease on the terms attached to the agreement.
Co-location is when multiple agencies or business units intentionally share a building or floor(s). They use shared amenities and follow shared building policies and/or principles. Each party usually signs up to a co-location agreement with the lead agency holding the head-lease.
In a co-tenancy, different agencies are based in one building, but each manage their own tenancy and lease with the landlord. Typically, the lease will contain a clause linking a tenant’s rent or obligations to the presence of an ‘anchor’ or lead tenant in the same building.
A deed of lease is a legally binding agreement that gives a tenant exclusive right to use a specific area for an agreed length of time. The agreement sets out the commercial terms of the agreement, the respective obligations of the landlord and tenant and the remedies available in the case of disputes or non-performance. It will also record ownership of respective assets in the premises, condition of the premises at commencement and detail the make good requirements at lease expiry.
A development agreement sets the terms for the development or refurbishment of a building or space, so it is ready for tenant occupation (e.g. in a turnkey arrangement) or in an agreed condition to enable tenant fit-out works to occur, prior to lease commencement and occupation. It will capture the agreed scope of works, the timelines for completion, cost allocations for the works and how delays, scope variations or disputes will be managed. The agreement will also outline the lease terms and conditions that will apply to the lease and require that a formal Deed of Lease is completed once all conditions (usually works completion) are satisfied.
In a gross lease, the tenant pays one fixed rent amount, subject to periodic review in accordance with the agreement. The landlord pays most of the building’s operating cost.
What the landlord usually pays for:
What the tenant usually pays for (their own premises expenses):
The costs (expenses) listed above are indicative only.
A licence that allows an agency to use one or two desks, or space within a shared workspace. The agency is given permission to use the specified area but does not have exclusive possession of it.
A legal agreement allowing a person or organisation to use a specific property or land owned by another party for a defined purpose, without granting exclusive possession or legal ownership. Commonly used for Retirement Villages, Māori land access or commercial, short-term, or community land use, it typically offers personal rights rather than proprietary interests.
An MoU is a formal but non‑binding document that records the intent, principles, and roles of the parties. It can set out any high‑level terms that have been agreed and/or the conditions and timings that need to be met. An MoU can be signed ahead of a co‑location to support early discussions and signal an intention to explore an arrangement. It does not limit further negotiation. Once a co‑location agreement is in place, it supersedes the MoU.
In a net lease, the tenant pays a base rent and a proportionate share of the building operating costs, charged separately as operating expenditure. Net lease structures can vary and, in some cases, will include a share of all building operating costs (a “triple net” lease). In other cases, it may just include a share of specific operating costs such as rates (a “single net” lease) or rates and insurance (a “double net” lease).
Typical building outgoings include:
Tenant’s direct premises expenses:
Same as under Gross Lease
Measures used to calculate the number of people who can be assigned to a space.
Density refers to the amount of floor space available per person.
It is used to understand how efficiently space is being used and helps with workplace strategy and planning for the right amount of space, ensuring comfort and functionality, identifying opportunities and making informed decisions about future needs.
For example, an NLA of 6,200m2 and a headcount of 580 would be a density of 10.68m2, using the formula NLA divided by headcount.
Density is a key metric in measuring the performance and efficiency of the government property portfolio.
Headcount represents the total number of people who, regardless of how many hours they work, will occupy the space.
Headcount includes the total number of staff assigned to an office as their primary work location, it should also include other people regularly based in the office, such as:
These groups are included because they all use space and resources in the same way as staff.
The maximum number of people allowed to occupy a building at any one time. This should be set by the lowest of:
Relevant Building code clauses are:
Examples of property professionals engaged to conduct maximum occupancy assessments are generally a collective of a designer/architect, fire engineer and/or building services engineer.
Maximum occupancy may be recorded or inferred from:
The relationship between building headcount and available workstations. For example, ten people sharing six workstations is a workstation sharing ratio of 6:10.
Sharing ratios should be based on actual attendance data or insight, which will be influenced by working from home policies, average absenteeism, travel and field-based work. This helps avoid providing too many or too few workstations.
These definitions are provided as a general guide and reflect common New Zealand commercial practice. Actual inclusions may vary depending on the measurement standard used, the lease documentation, and any agency‑specific requirements.
Gross floor area is the total floor area of a building. It is measured in square metres (m²) to the outside surfaces of exterior walls, or to the centreline of shared walls. GFA includes all internal spaces (both usable and non‑usable) such as plant rooms, stairwells, lift shafts, lobbies, and amenities. It typically excludes covered public car parking, vehicle ramps, and covered public walkways. Local authority definitions of GFA may vary.
Net lettable area is the total floor area of a tenancy that a tenant has exclusive use of. NLA includes all areas occupied solely by the tenant and excludes shared or common areas such as lobbies, stairwells, lift shafts, service risers, and shared amenities. It is the standard area used to calculate rent for office space and is defined in lease agreements either as either estimated or actual by a valuer.
In the Property Portal, agencies must record NLA based on how the space is used. For example, areas used for office work are classified as “office”, and areas supporting public interaction are classified as “public-facing”. If car parking is provided as part of the lease, it should be classified separately.
Net usable area is the portion of a tenancy that can be used for work purposes i.e. areas that can reasonably accommodate furniture or be fitted out as workspaces. It represents the actual area available for desks, meeting rooms, collaboration zones, and other workplace activities.
NUA excludes areas that cannot be used for work, such as bathrooms, stairwells, lift cores, plant rooms, structural columns, and any parts of the NLA made unusable by building elements, for example, areas beneath structural bracing or other obstructions.
Where an assessment requires NUA instead of NLA, the NUA measurement should be confirmed during the development agreement or lease negotiation to support performance assessments.
An agency login is required to view this content.
This section contains information which may be commercially sensitive and should not be shared publicly.