Landlords What Do They Look For in

Industrial Properties?

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Investment leases it's all about location

Industrial unit leases

When purchasing an investment property they would ideally like it in a suitable location for whatever it is, i.e. a retail shop would best be located in a high street and an industrial unit would best be located in an area where there is good road links. The best of these properties goes usually to institutional investors, the remaining landlords, still themselves substantial businesses, looking less at primary sites and more at secondary or tertiary sites.

Equally, they understand that prime locations, i.e. industrial parks that do not have good road access links or required heights for off-loading would not draw primary traders. For example, we have seen a large expansion of industrial units on a very large scale in the Bedford/Milton Keynes area, which has the M1 motorway link north to south, also access to north to south of a fairly central location and also access to the east to west roads, and has companies such as Amazon and various pharmaceutical companies interested in relocating in the area. Interestingly, in the industrial sector, particularly where movement of goods of primary concern, what is good for the larger business is also good for the smaller business.

Industrial units need good accessibility to pay the best rents on the leases?

The landlords also understand that dated industrial units located in areas where the road access and national grid are not that great will get lesser quality tenants/leaseholders. They do understand this but they nevertheless want the best available and they certainly want their property returning in at least the condition it was given in, if not the condition within the lease certainly a lettable condition.

The landlord's catch 22

The landlord of non-primary real estate/property will therefore get non-primary tenants/leaseholders. One category of these is new and start up businesses. It may well be the situation that you find yourself in and you will therefore look to limit their liability. This may be by requiring rent in advance, or by having very onerous lease clauses, we certainly feel that it is not a fair game. However, from the landlord's viewpoint he has a catch 22 situation as he requires the property to be leased, as this gains him an income stream, he appreciates the property is a primary so is limited on the type of leaseholders that will be looking to lease the property, or where the landlord takes a business risk and moves some of the goalposts, for example requiring six to twelve months rent in advance.

Leases in years to come

In years to come, this can be quite an interesting situation where perhaps the company has grown considerably and they have a very strong lease in the landlords favour, they perhaps took the property on in a poor condition and from the landlords point of view he feels that he gave them the opportunity to start up their business and perhaps many others wouldn't have taken the risk and as such expects the property back in the condition the lease requires. A business that has grown knows that they took the property on originally in a poor condition and feel that they should offer it back in that condition, having been, what they consider to be good tenants, i.e. they have paid the rent. You can see where a conflict arises in this situation.

When the dilapidations notice is served

When the dilapidations notice is served a company that has grown and expanded over the years is in a position to fight the claim (and we are presently dealing with a company that has grown to be much bigger than the landlord), however the landlord has the protection of the lease clauses and the tenant/leaseholder has no protection because he didn't have a schedule of condition carried out originally. This is where the phrase any fool can get a lease comes from, but it is a very different matter to get out of a lease.

If you need help and advice with regard to leases, dilapidations, schedules of condition, dilaps claims, scott schedules, building surveys, structural reports, engineers reports, specific defects report, structural surveys, home buyers reports or any other property matter please call 0800 298 5424 for a friendly chat. Please note we are independent surveyors.

If you would like Dilaps Help then please visit our website and for Disputes go to our Disputes Help site .

We hope you found the article of use and if you have any experiences that you feel should be added to this article that would benefit others, or you feel that some of the information that we have put is wrong then please do not hesitate to contact us (we are only human).

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Back to our main menu on Dilapidations

Dilapidations for Landlords and Investors including an example of a Scotts Schedule

Dilaps Claim by a Landlord

Landlord's View on a New Business Taking on a Lease

What the Landlord wants in a Tenant

Landlords, can you have too good a tenant?

Negotiating With a Landlord