What’s the difference between Net area vs Gross floor area?

In the article “10 Things to Know When Negotiating Office Rental Rates and Costs,” Maison Office highlighted the importance of clearly understanding how office space is measured, as different measurement methods can result in significant discrepancies between the actual usable area and the total rental cost.

This article provides a detailed overview of two key concepts, Gross Area and Net Area, as well as effective negotiation strategies to help businesses optimize both office rental costs and leased space efficiency.

1. Understanding Office Net Area

1.1 What is Net Area?

Net area refers to the actual usable area of an office or workspace, including the floor area and areas used for private purposes such as restrooms, break rooms, and pantry areas. This is the area used to calculate rental costs and occupancy-related expenses.

1.2 How to Calculate Office Net Area

Calculating office net area is important for businesses to determine the exact space they will use and pay for. The steps to calculate net area include:

• Accurate measurement: Use a tape measure or laser measuring device to measure the length and width of the office. Measure from wall to partition, making sure all corners and recessed areas are included.
• Area calculation: Multiply the length by the width to calculate the area in square meters (m²).
• Confirm the area with the landlord: Compare your calculated area with the area stated in the lease agreement. If there is any discrepancy, contact the landlord for clarification.

1.3 Key Considerations When Calculating Net Area

Net area is the actual usable area of an office, excluding the common areas of the building. When calculating net area, businesses should take note of the following:

• Review the lease agreement carefully: Office lease agreements usually specify the net area and its calculation method. Make sure you fully understand and agree with these terms before signing.
• Measure accurately: Use accurate measuring tools to ensure the calculated figures are correct.
• Consult an expert: If necessary, seek advice from a real estate professional to ensure the net area is calculated accurately and fairly.
• Verify the area: Before signing the lease agreement, have the net area checked by an independent party to ensure you are not charged for areas that do not belong to your office.

Net area is an important factor in office leasing, directly affecting rental costs and workspace efficiency. Understanding and accurately calculating net area helps businesses make more informed leasing decisions and optimize costs.

2. Understanding Office Gross Area

2.1 What is Gross Area?

Gross area refers to the total leasable office area, including the area used exclusively by the tenant for work purposes (net area), plus the shared/common areas such as elevators, corridors, restrooms, reception lobby, staircases, emergency exits, and other common facilities.

Gross Area = Net Area + Common Area 

2.2 How to Calculate Office Gross Area

Calculating office gross area includes the following steps:

• Measure the length and width of the entire building: Use a measuring tape or accurate measuring tools to measure the building’s length and width from one exterior wall to the other.
• Calculate the total building area: Multiply the measured length by the width to determine the total area of the building.
• Include common areas: Add common areas such as the lobby, corridors, restrooms, and other shared/public areas to the total calculated area.

2.3 Key Considerations When Calculating Gross Area

Similar to net area, when calculating gross area, businesses should take the following factors into account to ensure the area is measured accurately and completely:

• Review the lease agreement carefully: Office lease agreements usually specify the gross area and its calculation method. Make sure you fully understand and agree with these terms before signing the lease.
• Use accurate measuring tools: Use precise measuring tools to ensure that your calculated figures are accurate.
• Consult an expert: If necessary, seek advice from real estate professionals to ensure the gross area is calculated accurately and fairly.
• Verify the area: Before signing the lease agreement, have the gross area checked by an independent party to ensure you are not charged for areas that do not belong to your office.
• Understand the difference between net area and gross area: Clearly understanding the difference between net area and gross area helps you gain an accurate view of the actual workspace and the related costs.

Now that you have a clear understanding of how office area is calculated, Maison would like to highlight a few key considerations to help ensure a fair and balanced office lease negotiation for both the tenant and the landlord.

3. What is Semi-Gross Area?

Semi-gross area refers to the total area after excluding vertical spaces such as elevators, emergency staircases, and ventilation shafts. In other words, semi-gross area includes the tenant’s leased area and the shared corridor area.

Semi-Gross Area = Net Area + Shared Corridor Area 

4. Which Method Is Used to Measure Leasable Area?

Professional Grade A, B, and C office buildings only charge rent based on the area actually used by tenants. There are three common methods for measuring office area:

• Clear internal measurement: Measuring the clear usable area inside the office.
• Centerline measurement: Measuring based on the centerline of the walls and partitions surrounding the office.
• External wall measurement: Measuring along the outer edge of the walls and partitions surrounding the office.

The clear internal measurement method is usually 3–5% smaller than the construction area measurement method, which is measured along the outer edge of the walls.

4.1 Pay Attention to Inefficient Areas

These include dead corners, areas that cannot be used for any practical purpose, offices with irregular layouts that are not rectangular or square, or spaces with multiple columns that increase the amount of inefficient area.

4.2 Re-measure the Office Area Before Signing the Lease Agreement

The area provided by office buildings is not always completely accurate, so re-measuring the office space is a necessary step. While a discrepancy in area may not significantly increase the monthly cost, it can become a considerable amount over the full lease term of 3–5 years. To protect the interests of both parties, the tenant and landlord should re-measure and agree on the final area before proceeding with the lease agreement.

To determine the exact office area your business needs to lease, please refer to the article on office space planning standards. This will help you choose a suitable office, avoid budget waste, and prevent potential issues when your team size changes in the future.

Contact Maison Office – a specialized office leasing and consulting service provider – to receive fast and completely free consultation and support in finding suitable office space for lease.

5. Frequently Asked Questions About Office Area

5.1 What is the difference between Gross Area and Net Area?

Gross area refers to the total floor area for which tenants are charged rent, including common areas such as corridors, lobbies, elevators, and other shared spaces. Net area is the actual usable area used for business operations, excluding common areas. This difference directly affects office rental costs.

5.2 Why should businesses pay attention to Net Area when leasing an office?

Net area helps businesses calculate rental costs more accurately, as it represents the actual space they use. Understanding net area helps tenants avoid paying for unusable areas and optimize workspace efficiency.

5.3 What is Semi-Gross Area and how is it different from Gross Area?

Semi-gross area refers to the leased space plus certain shared areas, excluding vertical spaces such as elevators, emergency staircases, and ventilation shafts. It is similar to gross area but excludes areas that cannot be used for work purposes.

5.4 What is the formula for calculating Gross Area and Net Area?

Gross area is calculated based on the total building area, including common spaces. The formula is: Gross Area = Net Area + Common Area

Net area is calculated by measuring the length and width of the actual usable space, excluding unusable areas such as walls and common areas.

5.5 How can businesses determine the exact office area?

Before signing the lease agreement, tenants should request that the office area be re-measured by an independent party to ensure accuracy. Inefficient areas or irregularly shaped spaces may increase rental costs, so both net area and gross area should be carefully reviewed to protect the tenant’s interests.

Bui Duc Huy

Editor and content team manager at Maison Office.

With over 5 years of experience in consulting and extensive content editing in the real estate services and interior design field. Sharing valuable information with customers, partners, and attracting millions of views.