5 essential things to consider when leasing industrial property

Two people standing in a new empty industrial property (warehouse).

As we know, leasing industrial space is costly - not just on your finances but also your time and resources.

So when leasing industrial real estate, consider these 5 things...

Consider Warehousing Space Carefully

If you intend to use the warehousing space for manufacturing you may only be utilising floor space, if you plan to store goods you will need to consider both the vertical space available, as well as the horizontal space (the square meterage), as a determination of how much space is available. Why pay for air? Make sure the industrial space you lease is practical for your unique requirements.

It is also important to consider how much of the space is usable. If you plan on stocking goods to the ceiling but lose valuable racking space due to structural beams then you may be able to negotiate the lease to pay for only usable square metres. The usable height to which you can store your products or racking is referred to as the ‘springing height’.

Ensure that you’re paying for your warehouse space according to how you will be using it. This small determination of measurement could save you thousands.

Out five top tips to consider when leasing industrial space.

Define Responsibility for Repairs and Maintenance

Most industrial leases require the tenant to pay for maintenance costs required for the general upkeep of the building. It is important to clearly define the requirements of these conditions included in the lease. You may be required to service the air conditioning units in the building at your own expense, but would you also be required to pay for a new roof or structural damage to the building that you didn’t cause?

Determining who will be responsible for fit-outs, maintenance and repairs during lease negotiations and working towards terms and conditions that are as favourable as possible to your business could save you save you a considerable amount of money in the long run.

Consider Future Warehouse Alterations & Improvements

Most industrial leases contain a clause that requires that the tenant obtain approval from the landlord before making any alterations or improvements to the property. This clause is generally designed to ensure that the tenant does not make any major structural changes to the building that do not suit the landlord.

When negotiating your lease it is important to ask that it be stipulated in the lease agreement that the landlord will not reasonably withhold consent or delay giving consent. Delay in receiving consent for modifications could affect your ability to trade or run your business. These delays could result in a drop in productivity, even while having to continue to pay your fixed costs.

uTenant can refer you to an experienced legal representative who can assist with reviewing and negotiating these points within lease documentation.

Industrial Leasing for Beginners

Optimise Use of Space With Smart Fit-Outs

By planning and implementing a smart warehouse fit-out which optimises the use of space, you can maximise the flow of goods through your warehouse space and ultimately increase performance levels. Elements such as a mezzanine level can be incorporated into the fit-out plan to provide extra floor space and achieve maximum space efficiency.

Don't Limit Your Options to Only Purpose-Built

If you require a specialised industrial facility, you may be thinking that only option is a purpose-built industrial building (often secured by way of a ‘pre-lease’ arrangement).

At uTenant, we pride ourselves on transparency and make sure all options are on the table for industrial tenants, given your timing, lease term, property specifications and location. We are always on hand to provide tenants with as much assistance as they require at each step of the process. Simply reach out to our friendly team and we can help you understand the most cost-effective ways to reach your industrial property leasing goals. We can put you in touch with all the right people DIRECTLY to ensure you are protected, informed and prepared.

If you’re looking for your perfect industrial property lease match register at uTenant today. We will provide you with a personalised list of eligible properties.

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Updated: 27 November 2020