Short-Term Office Rental vs a Commercial Lease in NSW

By Bilal Alwan, Manager, Hunters Hill Offices · Updated October 2026

When your business outgrows the spare room, you have two main ways to get an office: sign a commercial lease in NSW, or take a short term office rental such as a serviced or private office membership. They suit very different situations. This guide explains what a lease usually commits you to, based on guidance from the NSW Small Business Commissioner, and how it compares with a membership.

We run serviced offices, so we have a view. We’ve tried to keep the lease side factual and to point you to the official sources.

What Is a Commercial Lease in NSW?

Either way, a lease is a serious financial commitment. The NSW Small Business Commissioner puts it plainly: when you sign a lease, you agree to pay the rent for the full term, and a lease is a contract you probably won’t be able to get out of early.

Does the Retail Leases Act Apply to Your Lease?

According to the NSW Small Business Commissioner (checked October 2026), the Retail Leases Act 1994 generally covers a lease where:

• the shop is less than 1,000 square metres
• the business sells or supplies goods or services and is a type of retail business listed in Schedule 1 of the Retail Leases Regulation 2022, or the premises is in a retail shopping centre
• the lease is for six months or more and less than 25 years.

Some premises are excluded, including shops larger than 1,000 square metres and offices located above a retail shopping centre. The Act generally does not apply to leases of less than six months. The Commissioner also notes that different laws cover commercial and residential leases.

Why it matters: the Act gives tenants specific protections, such as disclosure statements and rules on lease preparation costs and cash bonds. If your office lease falls outside the Act, those rules may not apply, and the lease terms carry more weight. A solicitor can tell you which category your lease is in.

What a Commercial Lease in NSW Usually Commits You To

The Commissioner’s guide to understanding the costs of leasing lists the main costs. In general terms:

Security: bond, bank guarantee or personal guarantee

The landlord may ask for security, often a fixed amount or a number of months’ rent. It can be a cash bond, a bank guarantee or a third-party guarantee. Under a retail lease, a cash bond must be lodged with the NSW Government’s retail bond scheme within 20 business days. If you personally guarantee a lease, the landlord can pursue you if the business defaults.

Rent and rent reviews

Rent is usually paid monthly in advance and often increases each year, by a fixed percentage or in line with CPI. The landlord does not have to reduce the rent if your business is struggling.

Outgoings

Outgoings are the landlord’s costs that you agree to pay on top of rent. They can include council and water rates, land tax, cleaning, security, insurance, utilities and management fees. They can change over time.

Fit-out

Tenants are usually responsible for fitting out the space: fixtures, fittings and sometimes part of the landlord’s costs to prepare the premises. You may also need council approval for the fit-out or the type of business.

Make good

Make good clauses set out what you must do before the lease ends. This often means returning the premises to their starting condition, and can mean stripping back to a bare shell and repainting.

Lease term and options

The term is the fixed minimum period you commit to. An option gives you the right to renew for a further period, but you must exercise it by the deadline in the lease, usually some months before the end.

Disclosure statements and registration (retail leases)

For retail leases, the landlord must give you a written disclosure statement at least seven days before the lease is entered into, covering the term, rent, outgoings and fit-out. You then give the landlord your own disclosure statement within seven days. Retail leases longer than three years, including any option period, must be registered, and the tenant usually pays the registration fee.

Short Term Office Rental: How a Membership Works

A serviced or private office membership is a different model. Instead of leasing an empty space and setting it up, you pay a monthly fee for a furnished office in a shared building that someone else runs.

At Hunters Hill Offices, as of October 2026:

• 7 furnished private offices at 53-55 Gladesville Road, Hunters Hill
• from $1,790 per month + GST, all-inclusive
• 3-month memberships, with 5% off for 6 months and 10% off for 12 months
• meeting room access included
• reserved parking available at $89 per week.

There’s no fit-out to pay for and no separate bills to manage. See the private offices page for current availability, or contact us to arrange a look around.

Short Term Office Rental vs a Commercial Lease: Side by Side

	Commercial lease	Short term office rental (membership)
Commitment	Fixed term set in the lease, often with options to renew. Rent is payable for the full term.	Hunters Hill Offices: 3-month memberships, with discounts for 6 or 12 months.
Upfront costs	Security (bond, bank guarantee or guarantor), fit-out, your own legal advice.	Monthly fee. Offices are already furnished.
Ongoing costs	Rent plus outgoings, utilities, insurance and reviews.	One all-inclusive fee, from $1,790/month + GST.
Fit-out	Usually the tenant’s cost.	Not needed.
End of term	Make good obligations may apply.	Move out at the end of your membership.
Paperwork	Lease document; for retail leases, disclosure statements and registration if over three years.	Membership terms. No lease to negotiate.
Meeting space	Only what you lease and fit out.	Meeting room access included.
Best for	Established businesses that need a shopfront or larger space for years.	Small teams that want a professional base without a long commitment.

Which Option Suits Your Business?

A lease can make sense if you need street frontage, a large or custom space, or you are confident about the next several years. Before signing, the Commissioner recommends independent legal and financial advice and checking with council about the type of business and any building work.

A membership tends to suit sole traders and small teams who need a professional office now and want room to change plans. If you only need a business address for now, see our virtual office plans and our guide to virtual office costs in Sydney.

Whichever way you go, compare a commercial lease in NSW with a short term office rental on total cost over the time you actually expect to stay, not just the monthly figure.

This is general information, not legal advice. See a solicitor before signing a lease, and check your situation with the NSW Small Business Commissioner.