How to rent a warehouse?
Renting a warehouse is a simple process, but committing to a lease involves many legal and practical considerations to ensure you have the right unit for your business. Take a look at our handy guide below to find out more about the process of renting a warehouse, or you can simply search for available warehouses to rent with our search tool.
If you have any questions or want to view a warehouse, please get in touch with us on 0800 122 3330 – we’d be delighted to hear from you.
Step 1: Things to consider when looking for a warehouse to let
Firstly, you need to consider several important things below to find the right warehouse for your business.
Warehouse size: How much space do I need?
Choosing the right warehouse space for your business will depend on what you plan to do with it–whether it’s for storage, distribution, manufacturing, or a mix of activities. To find the perfect fit, you’ll need to consider the total square footage or the actual measurement of the warehouse and how it aligns with your business needs. It’s also important to think about both your current and future space requirements, as your business will keep changing over time.
In most cases, manufacturers, exporters, or wholesalers use a medium-sized to bigger warehouse (typically around 30,000 sq ft) while smaller warehouses are often being used by e-commerce or new businesses (around 1,000 sq ft up to 5,000 sq ft).
Lease length: How long do I need the warehouse for?
Your business will likely change over time, so you need to consider how long you can commit to the unit. Longer leases often result in lower rents, so think about the maximum time you can commit to get the best possible deal. In most cases, warehouse leases often range from 3 to 5 years. However, there can be variations where shorter or longer lease terms are negotiated based on specific circumstances.
Location: What is the best location for your warehouse?
Location is one of the most crucial things to consider when choosing a warehouse for rent because it will highly impact your supply chains, operational costs, rent costs, delivery times, legal compliance, and more.
Before renting a warehouse, it’s worth considering how accessible and easy it is to transport goods. A well-located warehouse should have good access to major motorways, transportation hubs, city centre, ports, or airports–depending on your business needs.
Timescales: How quickly can you move in?
Warehouses vary in terms of availability, some warehouses ready for immediate use while others may require renovation or construction to meet your specifications. You’d want to plan in advance and make sure you notify the agent or landlord about your timescales. Don’t leave anything to the last minute and allow plenty of time for sorting out the legal documentation and securing any necessary consents.
At Industrials, you can move in as quickly as one week from the initial inquiry with our Smart Lease. So you won’t need to worry about lacking time when moving in.
Security: How safe is the warehouse?
Security should be a top priority to consider when looking for a warehouse for rent. Especially if you’re storing a lot of valuable items in the warehouse, you’d want to make sure your goods are stored safely. You should check with your agent or landlord if the warehouse is equipped with mandated security systems (e.g. 24-hour CCTV, on-site security guide, fire alarm system, fencing, and more).
At Industrials, you can rent warehouse space with excellent security systems, such as a 24-hour surveillance camera, an alarm system, fire detection, an electric roller shutter door, access control, gates, lighting, and more. These features are already included in your lease.
Step 2: How much does it cost to rent a warehouse?
It’s essential to determine the actual cost of renting a warehouse before you commit to a lease. To get an accurate estimation of the total expenses, you should consider the following additional costs.
Most landlords will require a rent deposit, which can be refunded if you don’t cause any damage or unpaid rent during your leases. The deposit amount is typically equivalent to a few months rent (e.g. from 3 or up to 6 months), and will be payable at the start of a lease along the first month or quarter’s rent.
Maintenance and repairs
You may be responsible for internal and external repairs or only internal fixes of your building throughout your lease–depending on your leases. Internal repairs or IRI leases usually cover the structure of your home, such as walls, roofs, and floors, while external repairs or FRI leases cover paths, roads, gardens, communal areas, and more.
Warehouse insurance is essential to protect your inventory and cover any liability risks. The cost of insurance will depend on factors like the value of your goods, location, and the level of coverage required. A landlord will almost always insure the building on your behalf and recharge the cost to you. However, you will also need to take out your insurance policies to cover things such as contents and public liability.
Business rates are a local tax paid by commercial tenants on all non-domestic and industrial units or business properties, such as shops, offices, warehouses, and more. They are typically around 50% of the rent charged. If your rateable value is less than £15,000 per year, you may be eligible for small business rates relief or may not be liable for paying rates at all.
Most landlords charge VAT for all goods and services, including rent and service charge payments. If you’re unable to get a refund for the VAT, you should consider this as an extra cost. Even if you can reclaim VAT, it’s important to note that there might be a delay in receiving the refund, leading to a temporary cashflow shortfall.
At your lease end, you are usually required to return the warehouse ‘in good and substantial repair and condition’. This usually means no worse than when you moved in, but depending upon the condition when you took the premises, it can mean putting it into a better condition than when you took the lease. Some landlords prepare a document or photograph (Schedule of Condition) to clearly record the building condition when the lease starts to help reduce your liability. Some all-inclusive leases already include dilapidations, so you won’t need to worry about dilapidations at the lease end. Read our guide to dilapidations for more information.
Water and utilities
You’ll need to account for utility costs such as electricity, water, heating, and cooling. These expenses are typically separate from the rent cost and can vary depending on the warehouse size and your usage. For example, it would be more expensive if you require a heavy electric machinery inside the warehouse. Discuss your electrical, water, heating, or cooling needs with your landlord to estimate the electricity costs before renting a warehouse.
Step 3: Drawing up a shortlist
A healthy shortlist will help you find the best space for you at the right price. The key things to consider when drawing up a list are:
View some properties
It’s important to see a few different warehouses to get some perspective on what is available. It will also give you an opportunity to ask the landlord or letting agent on some of the finer details, and get a feel for what kind of landlord they might be. Take lots of photos to help remember the important things like what utilities are available, or for future space planning and fit-out.
To explore more alternatives, you can easily browse and find a warehouse to let that suits you online.
Get some proposals
There is often a difference between the quoted rent and the actual rent that can be agreed upon. Ask for a proposal you can consider and make sure it covers all the key cost areas. It’s a good idea to request a proposal that you can carefully review and ensure includes all the important cost factors. This will help you understand the complete picture before making a decision.
Ask the right questions
- You will need to agree with your landlord on several key aspects as part of a lease. Key ones to consider include:
- How long is the lease?
- Does the lease include any break options?
- What is the notice period to terminate the lease?
- Am I liable for external repairs and maintenance?
- What does the service/maintenance charge include?
- How much has it been in previous years?
- What restrictions are there on sub-lettings, assignments, alterations, use or access?
- Is my lease inside or outside the protections of the Landlord & Tenant Act 1954? How often do I pay my rent, and will it increase in future?
- When can I move in?
- Who pays for utilities and waste disposal?
- Will the landlord provide lighting or heating equipment?
You can negotiate your rent price if the landlord offers a non-quoting rent. Non-quoting rent is when the price for renting a warehouse is not openly advertised or publicly stated. Instead, you would need to contact the landlord or the agents directly to find out how much the rent is. This allows more privacy and flexibility in negotiations. Additionally, an ordinary letting has many areas for negotiation besides the rent and lease terms. Depending on how good the initial deal you have struck is, there may be other areas you can improve upon.
Step 4: Getting your lease in place
The following section runs through the different stages of the leasing process.
Agreeing Heads of Terms (HOTs)
The Heads of Terms (HOTs) should include all of the important information about your lease and cover everything you have agreed upon. Anything left out runs the risk of not being included in your lease, which means you can’t count on it in the future. If the landlord or their representative has made any promises or commitments before or during the lease negotiation, you need to ensure that these are clearly stated in the HOT.
You may or may not need to instruct a solicitor to help you, depending on the complexity of the agreement you are signing. However, always take professional advice if in doubt. Once your lease is signed, you can’t change it, and a court is likely to enforce the content regardless of whether you understood what you were signing up for.
Completing “Know Your Customer” checks
At this stage you may be asked to provide information to confirm your identity with a government-issued photo ID (e.g. driver’s license, passport, or state ID card) and proof or address with a utility bill, or company financials.
Choosing payment method
Some landlords require the rent to be paid by direct debit or standing order. Very few landlords accept payment in cash. If you have a new business, you will need bank accounts set up and ready to go. At Industrials, your rent is paid directly to us by BACS or direct debit.
Before the lease starts, you also need to transfer any advance rent or rent deposits. If the landlord is not reputable, it may be prudent to transfer these to a lawyer registered with the Law Society to give you protection if the lease is not completed.
The lease or licence will need to be signed before you can move in, as well as any other documents relating to it, such as plans, schedules of conditions, or licences for alterations. Make sure your signatories are available when you need them.
Once all the above is done, you will receive confirmation that the lease has been completed. You should then receive the keys for your new warehouse and get back to work in your new place!
If you need to know more information about renting an industrial unit, you can read our comprehensive guide.
Why choose Industrials to rent a warehouse?
With Industrials, you can find a warehouse suitable for all your business needs. Our spaces are flexible, meaning you can use them to cover a wide range of uses – this includes:
- industrial or commercial businesses
- commercial storage
- trade counters
We also offer a choice of two lease types. You can choose a traditional lease, or our Smart Lease which streamlines the legal aspect of securing a warehouse for rent, offering a simple and fast process.
Examples of the benefits of our Smart Lease include:
- clear and simple T&C’s
- it can be completed online
- lease duration ranges from 3 to 5 years
- no legal fees required
- all inclusive costs (maintenance charge, insurance and dilapidation cover)
- lease a warehouse in 1 week
FAQs about renting a warehouse
What is a warehouse?
A warehouse is a commercial facility or storage space used for storing goods, products, or materials. It serves as a central hub for inventory management and distribution in various industries. Warehouses are normally designed to accommodate large quantities of goods, organised in a systematic manner to facilitate efficient storage, retrieval, and transportation. They usually have loading docks, shelving or pallet racking systems, and may include additional amenities such as office spaces, security systems, and equipment for handling and moving goods. Warehouse is suitable for any kind of businesses, if you need help on finding a right warehouse for you, you can contact us at 0800 802 1285 or message us by email.