Waikato Business News June/July 2018

WAIKATO BUSINESS NEWS June/July 2018 23
Five Warehouse tenancy myths:
what you should focus on instead
The thing about being in the market for a new warehouse is:
when you’re looking for something so big, it’s hard to think small.
But when it comes to signing a years-long commercial lease,
the little things are often more important than the large, obvious
ones. And sometimes those obvious things should be crossed
off your list all together…
MYTH 1: I need to find the
cheapest warehouse
Of course the cost of your tenancy
should be of primary concern.
But make sure you’re looking
at the total cost over your
whole lease term, not just the
number beside the dollar sign in
the listing.
Warehouse tenancies are
generally the longest commercial
leases, and when you’re
signing on for 10 years, there
are many other factors to consider
besides how much your
monthly rent will be.
To start: is the lease Gross
or Net? The former includes
operating expenses, the latter
means you’re responsible for
costs such as washing the exterior
of the building, landscaping,
repairs and maintenance
(R&M) and management fees
on top of the rental.
When comparing leases, add
up the value of your clauses
and concessions carefully to see
which tenancy truly makes the
best financial sense.
Takeaway tip: Look at the
total occupancy cost over the
term of your lease, rather than
just the listing price.
MYTH 2: It’s all about ecuring
maximum height
While office and retail tenants
are all about those square
metres, warehouse tenants can
get obsessed over how many
metres of clearance they have
above them – and all the things
they can stack within it.
But while extra stud height
is great to have, cubic capacity
is affected by what you’re storing,
and whether the building
has sprinklers to meet regulatory
requirements – which are
changing all the time.
Looking skyward and estimating
pallet heights with a
“she’ll be right approach” is not
the way to go.
Takeaway tip: Invest in
getting a racking specialist to
overlay a racking plan over the
building footprint to ensure you
know how many pallet spaces
you can realistically fit in. Then
investigate the sprinkler system.
MYTH 3: It’s what’s on the
inside that counts, isn’t it?
Not unless you pass the right
parking lot and loading dock on
the way in, it’s not.
While you probably walk
straight inside when viewing
a house or a shop, viewing a
warehouse should always start
with assessing access to the
site.
Yard access and turning
areas are of paramount
importance, because any hindrance
to product distribution
will add costs right down the
production line.
This is the business end of
your warehouse, so good business
practice demands that it be
your first priority.
Takeaway tip: Don’t be
embarrassed to pull out a measuring
tape if you need to ensure
those precious few extra inches
in the docking bay exist in more
than your imagination.
MYTH 4: Health and
safety starts inside
Yes, you probably have fallible
humans operating heavy
machinery to concern yourself
with inside, but there are also
dangers to look for outside your
new warehouse door.
On your inspection, check
the orientation of the buildings,
ensuring that they and
their yards aren’t going to be
overly affected by the weather
– high winds, in particular. Will
your vehicles be able to access
the loading bay without being
aversely affected? And are car
and truck accesses separated
for health and safety purposes?
Takeaway tip: Ensure your
potential yard has safe container
set-down and truck manoevering
areas.
MYTH 5: I can find a great
warehouse by myself
Even if you could locate every
warehouse listing on the market
(hint: you can’t, as many
are gone before they’re even
listed), using the services of
an agent is still an excellent
idea.
Getting through the door
via a registered agent not only
gives you the pick of the crop,
it makes the signing process a
lot less stressful.
As we mentioned earlier,
commercial warehouse leases
are usually the longest type
– so negotiating the best deal
upfront is worth doing and
worth doing well.
Takeaway tip: Negotiating
a warehouse lease is a tricky
business. Find the commercial
leasing expert who will help
you do it right at Bayleys.
www.bayleys.co.nz/workplace/articles/insights
Commercial
Property
Management
At Bayleys, we believe relationships are
what businesses are built on and how
they succeed.
We understand that to maximise the
return on your property you need:
Professional property management
A business partner that understands
your views and goals
Speak to your Bayleys team today
SUCCESS REALTY LTD, BAYLEYS,
LICENSED UNDER THE REA ACT 2008
Jan Cooney
Senior Commercial Property Manager
P 07 579 0609 M 027 408 9339
jan.cooney@bayleys.co.nz
Brodie Thomas
Commercial Property Manager
P 07 579 0608 M 027 746 9218
brodie.thomas@bayleys.co.nz