The demand for commercial warehouses has almost doubled over the past decade, driven by the significant rise of e-commerce. However, they have always been essential, even for business functions outside of e-commerce, especially for storage and manufacturing.

Renting a warehouse makes perfect business sense if you’re looking to build a long-term strategy for growth. Renting gives you greater flexibility and provides the ability to upsize as you grow. You may even choose a storage or fulfilment warehouse away from office or customer-facing facilities, simply to enable faster and more cost-effective delivery times.

Before you begin your search for a commercial unit, there are many factors to consider. In this guide, we take you through the process of leasing a warehouse – from finding your ideal space through to moving in.

Leasing a warehouse

1. Make a warehouse lease specification checklist

Firstly, take the time to find a warehouse space that works for you. For your commercial property lease to be strategically and commercially successful, it’s important to consider a few core warehousing elements.

Location

Finding the right warehouse location is key to any property search. You may want to ask:

• Do you need to be near a central transport hub or motorway? 
• Would it be more beneficial for your space to be in an urban or remote location?
• Does the location need to have last mile capabilities?
• Is the local working population suited to your requirements?
• Does it offer the space you’ll need to expand in the future?
• Is it a secure location, or will you need to pay extra to keep it safe?

Size & use

How much space do you need today, and how much will you need tomorrow? Also, the nature of your business will help you plan the type of warehouse layout you want – whether it’s for storage and distribution, manufacturing, or a mix of the two. 

Warehousing can be complex, so start by creating clear selection criteria. This should include what you need to use the space for and what equipment you’ll require. Considerations can often have multiple layers:

• If you intend to use high storage racks, will you also have enough room for required machinery like cranes to work freely? 
• Is there enough space to allocate room for a few desk stations for your employees, or would you need a separate office?
• How much room will you need for heavy equipment? What about any special requirements like reinforced floors with high loading capacity, or high-volume power sources?
• How many loading doors will you need for receiving and shipping goods? How about loading dock requirements? If you’re using specialist loading equipment, determine the height of the doors and whether you’ll need ramps. You may also want to consider loading shelters to minimise hot or cold air entering the warehouse.
• Will the space have enough power capacity to support your charging requirements? Whether you have fleet trucks, conveyors, automation, or specialist equipment, your layout will be decided by the placement of your electricity supply.
• How can I plan the warehouse layout in a way that still accommodates requirements like fire safety?
• Is the space suitably secure for my stock, equipment, and other assets? Will I need to upgrade or add security features, such as cameras or fences?

Top tips:

Don’t forget to think about how much room you’ll need in the future. Flexible warehouse space can save you time and money down the line.

Higher spaces can offer much better value, as you only pay for the floor space used and not the height.

Amenities

What do your business and employees need? Do you need a warehouse situated near shops, gyms, places to eat and drink, and outdoor recreational areas? Do you require on-site facilities like car parking or loading doors for delivery? It would also be good to consider whether you need e-charge points, car parks, or a good transport network for employees to commute with.

Consider the requirements of your business and confirm with the landlord in advance. It could also be a good idea to discuss amenities with your staff, in case there are any requirements you’ve overlooked.

Top tip:

Remember to check the permitted hours of use for on-site amenities.

Check out the local street network to make sure you can access the site without any problems.

Duration

How long do you want to rent at your chosen location? Your business needs will likely change over time, so you may need to choose between:

• A longer lease for a property with space to expand over the years
• A shorter lease for a property that suits current but not future requirements

Moving Timescale

How quickly do you need to move in? Plan and make your landlord aware of your timescales. Even an ideal property may become unsuitable if your timelines don’t line up.

Be sure to allow plenty of time to sort out the legal documentation and secure any necessary consent. You will also need to consider how long you can afford to decrease or shut down your operations to facilitate the move.

Top tip:

Don’t leave everything to the last minute. Otherwise, you might find yourself in a weak negotiating position.

Factor in time to organise your equipment so it can be relocated quickly.

2. Finance planning

When budgeting to rent a warehouse, there are operating costs to take into account:

• Warehouse Rent: The monthly, quarterly, or annual cost of leasing a property. Direct debit is the most cost-effective and time-effective way to pay for your space.
• Deposit: An upfront cost that you’ll need to pay at the start of your lease, along with the first month or quarter’s rent.
• Business rates: The UK Government charges business rates on commercial properties, which are usually approximately 50% of the rent. Check to see if local or national government support is available to you. You may be able to apply for small business relief if your property’s rateable value is less than £15,000.
• Service and maintenance charges: An annual charge for upkeep of the communal areas of an estate, like landscaping and regular maintenance.
• Dilapidations: This covers any repairs needed at the end of a tenancy and will be explained in your lease.
• Legal fees: All parties will be responsible for their own legal costs incurred as part of the transaction. Bear in mind you may need to factor in extra time for any third parties.
• Insurance: Typically, the warehouse building itself will be insured on your behalf, which should be factored into your costs. You will also need to arrange your own policies to cover other important elements like contents and public liability.
• Repairs and maintenance: Whether you’re liable for internal and external repairs will depend on your lease agreement. Make sure you’re aware of what you’re responsible for before you sign the agreement to avoid unexpected bills.
• Utilities: Just like you would at home, you’ll need to organise your own gas, electricity, and water supplies, as well as waste disposal. Consider how energy efficient the warehouse is and whether you could do anything to improve it.
• Warehouse VAT: You’ll be charged VAT on all goods and services, including rent, service charge payments, and insurance recharges. Make sure to allow for them in your budget. If you can reclaim VAT, then remember to have a cash flow shortfall while you recover any VAT paid.

3. What’s next?

Before you start the leasing process, you’ll want to get an understanding of what the landlord will be like when you’re their tenant. Here are a few good questions to ask:

• Does the lease include any break clauses?
• If you need to terminate your lease, what’s the notice period?
• What do the service and maintenance charges include?
• In what condition will I need to return the property at the end of the lease?
• How often do I pay my rent?
• Will my rent increase in the future?
• When is the earliest I can move in?
• Are there outdoor storage options near my unit?
• Will I have designated parking areas?
• Will the landlord provide lighting or heating equipment?

4. Leasing process

Once you’ve chosen an industrial warehouse, the next step is getting your lease in place. Here’s what to expect:

• Agreeing on the Head of Terms (HOTs): This will include all the details of your lease and everything you have agreed up to this point. If you have negotiated something with your landlord either before or during your lease, make sure it’s included in your terms. Some leases qualify for handling in-house, reducing the time and cost of putting a lease in place.
• Complete the customer checks: These will vary depending on the lease. At this stage, you may be asked to confirm your identity by providing your passport, proof of address, or company financials.
• Signing: Many documents can now be signed online, helping you bring your move-in date forward.
• Keys: And last but not least! Once everything is signed and confirmed, you’ll receive the keys for your new property. Be sure to distribute keys for the moving day, especially if you hire a third-party moving company.

5. Find a space that grows with you

When leasing a commercial property, it’s important to think long term. When you do finally reach a point where it’s time to scale up your business, it can be far simpler and cheaper to expand your current operations rather than move to a new property.

In the case of a warehouse, scalability and flexibility could come from renting other units on the same industrial estate. You could also consider nearby outdoor storage opportunities, or even just look for industrial warehouses with enough height for high shelving as your storage needs expand.

Why rent through Mileway?

At Mileway, we want your business to be a part of an ecosystem that allows our customers to grow and succeed. That’s why we’ll help you scale your business and support your expansion into a new commercial space, even if you still have time left on your current lease.

“Mileway truly wanted our business to continue to succeed.”

Nick Jones, General Manager at The Fulfilment Centre, Asendia UK

No matter where you need to be, you’ll have access to our friendly staff and well-maintained properties. We offer more than 6,500 commercial properties for rent throughout the UK as part of a portfolio that stretches across Europe, so you and your business can continue to grow with confidence.

Want to find out more? Contact Mileway today for bespoke advice from one of our local commercial property experts.

FAQs

How much does it cost to rent a warehouse?

The cost of renting an industrial or commercial warehouse depends on a few factors:

• The floor space of the warehouse
• Floor load capacity
• Provision of amenities
• Location, including proximity to major cities and transport links
• Utilities
• Business rates
• Legal fees
• Dilapidations
• Insurance
• VAT

It is worth discussing a warehouse’s rental costs with your landlord before committing to help you understand whether it fits your budget. 

How much warehouse space do I need?

The amount of warehouse space you’ll need depends on a range of factors. These include:

• Size of machinery or equipment
• Need for computers and IT infrastructure
• Storage space requirements
• Loading dock requirements
• Number of warehouse employees
• Space-related safety requirements for compliance and insurance

As well as considering how much space you’ll need for current operations, you will also want to think about your future business. If you are planning to scale up over the next few years, you may well want to consider renting a larger unit than you currently require.