Should You Build or Lease?
Build-versus-lease is typically presented as a financing question, when it's actually a strategy question first. The financing comparison is the easy part — a spreadsheet can do that. The harder question is which posture actually fits how the organisation expects to operate over the next five to seven years.
Why the Framing Is Usually the First Mistake
Building suits organisations with stable, long-horizon space needs and the balance sheet to carry the asset. Leasing suits organisations that value flexibility more than control, or whose space needs will change faster than a building can be depreciated. Neither is inherently superior — but most comparisons never get to this question, because they never leave the cost-per-square-metre spreadsheet.
- How likely is headcount to change materially in the next 5–7 years?
- Does the organisation want to hold a depreciating or appreciating real asset?
- How much operational flexibility does the business model actually require?
- What does the balance sheet look like carrying a long-term asset versus a lease liability?
Cost is the easy variable. Fit is the one that gets skipped.
Testing for Fit, Not Just Cost
The error we see most often is running the comparison purely on cost per square metre, without weighting for how likely the organisation's needs are to change. A slightly more expensive lease that preserves flexibility can be the financially superior decision — but only if fit, not just cost, is actually tested.