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Leasing Industrial Units - What To Be Aware Of

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When looking to take a lease of an industrial unit, there are a lot of potential pitfalls. We've put together a checklist to give you peace of mind.

The following list are some areas to be aware of:

What is the permitted use? 

Identify which "Use Class" your business falls within, and have the agent confirm the designated Use Class for the premises. Industrial units will be one of these: 

B1             research and development of products and processes or any other industrial process which can be carried out in a residential area without causing detriment to the area;

B2             general industry not forming part of Use Class B1; or

B8             storage or distribution 

What are the vehicle access routes?

Consider if access is direct from a main road or is it through shared access roads. Are the access roads sufficient for the vehicles travelling to and from the premises?  

Is there parking and delivery areas?
  1. Check how many parking spaces are available with the unit.
  2. Are there enough spaces for your employees, visitors and deliveries? 
  3. Are the parking spaces to be used only by the premises or is it a first come first served arrangement with the remainder of the industrial estate. 
  4. Do not rely on being able to park along any estate roads surrounding the premises.
  5. If you have frequent deliveries then is there a designated unloading zone or delivery area/yard. 
What rights are there to alter the premises?

If the premises need to be fitted out to accommodate the business, check whether structural and non-structural alterations can be made, both internally and externally. 

Is there an estate (service) charge? How much?

If leasing part of an industrial unit then it is highly likely for there to be an annual service charge. 

Estate charges are common where premises form part of a larger development and serve to recover the cost of maintaining the estate roads, lighting costs and costs to maintain vegetation/grassed areas. Check whether there is an estate charge. 

What utility services are available? 

Are the current services available at the premises suitable for the intended use? Do you need to install new services, fibre optics and phone lines? Consider the costs and negotiate for a rent free period or reduced rent to off-set the installation costs. 

Are there any contamination issues?

Historic contamination is quite common with older industrial estates and/or new developments built on previous industrial sites. Ask the agent to ascertain whether the landlord is aware of any historic contamination. Also ask your solicitor to carry out an environmental search. 

If contamination is identified at the premises and no indemnity or insurance was put in place before completing the lease, there is a risk for a tenant to be held responsible to clean up the land including the costs in doing so even if they did not cause the contamination.

For more information contact Commercial Property expert Rachel McNulty
☎ 023 8021 3791