5 essential questions to answer when leasing warehouse space

Leasing warehouse space can be a complicated process and at whichwarehouse we’re all about helping our clients find the right warehouse in as simple a way as possible. This guide to warehousing will help you choose the best warehousing without difficulty.

 

Question One – What’s going on for me?

 

Surprisingly, this is the question that most often gets neglected by organisations. Why? Because all too often, warehouse space decisions are made in a hurry. Circumstances change, supply chains alter, products are suddenly in high demand, seasonal demand requires a change of pace and so on. As a result, many companies end up looking at warehouse space as their solution without ever looking at why they need the solution in the first place. So, what should you be looking at? Timescales are important – do you need warehousing in a hurry because you’ve failed to predict the market or because something else has changed? If it’s the first reason, learning the lesson this time around can stop future flawed decision-making. Another part of timescales is how long the need exists. Do you need a long-term warehouse space or is this a short-term solution? What length of lease will fit with your business imperatives?

Third thing to look at is budgets – knowing how much you can afford stops you becoming a ‘panic buyer’; there genuinely is warehouse rental space to suit all budgets but it’s important to know your own bottom lines before you start looking at what’s available.

 

Question Two – what incentives exist?

 

There may be commercial lease incentives available to a business seeking warehouse space. Of course the best incentive is if the right warehouse unit is in the right place at the right price, but there are sometimes other things on offer. For example, ‘fit-out’ deals – this is where a commercial landlord commits to fitting out a warehouse space in a specific way, often described as a ‘contribution’ or ‘discount’ to the overall cost of the fit out. This could be in relation to the installation of new fixtures, fittings or appliances. Traditionally the tenant covers the upfront cost and files for a reimbursement of a percentage of costs from their landlord. Normally warehouse tenants will need to have already signed a lease and obtain quotes for the work before a fit out arrangement can be in place. Rarely, but potentially, warehousing can also come with a rent-free period. This usually applies in relation to new warehouse space where a landlord may offer a ‘opening deal’ in order to drive productivity and give a new warehouse development a kick-start. Also occasionally, certain areas are receiving economic incentives like development grants or the spring 2023 budget decision to provide £400m for “levelling up partnerships” in areas including Redcar and Cleveland and Rochdale. In such cases, there may be government grants or other incentives to move warehousing operations into partnership areas.

 

Question Three – how is accessibility?

 

The location of your warehouse determines many things: how quickly your product gets to customers, obviously – so logistics considerations are essential. Are local roads congested, if you mainly use road transport? How close is the warehouse space to rail routes? Are there alternative transportation routes if your primary choice of transportation isn’t available, say through strikes, bad weather or other local conditions? Warehousing facilities need to be suitable as well, ramps and dock doors, turnaround areas and lighting are serious considerations when choosing the right warehouse space for your business. It’s equally important to know if there are local restrictions such as acceptable hours of operation, which could impact your ability to run your warehouse operations at weekends or with evening shifts, for example. Staff transport also needs to be borne in mind – how are you expecting warehouse personnel to reach your facility and what impacts might transport strikes or bad weather have on their access routes? Will relocation affect your transportation costs and/or delivery times?

 

Question Four – what are your specialist requirements?

 

Choosing warehouse space can be simplified if you have a clear picture of the type of storage you need, the amount of storage and any special accommodations a warehouse needs to offer. Considerations include – is your product range a risk of damage from temperature fluctuations; that doesn’t just mean refrigeration, but whether high, or low, temperatures could cause spoilage to your SKUs. Do you need special storage and handling for products like plants, liquids or glassware? Is yours a business that offers hazardous products? What is your product turnover rate and does that limit or affect the kind of storage space you can opt for? Do you need sprinkler systems, refrigeration or specialist lighting? Are your operations high value, requiring extra security systems?

 

Question Five – what other services are on offer?

 

Warehouse space can be highly varied. If you are not looking to lease a warehouse space to operate yourself and are instead looking for third party logistics solutions, where you outsource your goods to a warehouse for them to manage, then many other services become available. Some warehouses offer fulfilment services of various kinds from kitting to gift packaging. Others offer pallet storage, and even palletising of freight to customers or de-palletising of incoming goods. Some warehousing facilities are partly or even wholly automated. Knowing which services will reduce your operational costs, add value to your company proposition or allow you to divert time, money and resources into developing other areas of your company. This can mean that identifying the right warehouse space for your company isn’t just part of your business, it’s actually a contributor to your overall business growth.

 

Leasing warehouse space – the solution

 

If you can answer these five questions successfully, you’ll have an excellent outline by which to judge the warehousing that’s available to you. And that means that you’ll be well equipped to make a swift, simple decision that will deliver the best solution to meet your company’s needs and to help your business grow more rapidly and effectively.