Answers · Industrial lease key terms
What are the terms that matter most in an industrial lease?
Direct answer
The terms that matter most in an industrial lease are the term and any renewal options, the rent review mechanism, whether outgoings are net or gross, the permitted use, the make-good obligation, the security required, and your rights to assign or sublease. Together these determine your real occupancy cost, your operational flexibility, and how secure your tenure actually is.
Term and options set how long you're genuinely secure for — a five-year term with two five-year options is a very different commitment to a bare five years with none. The rent review mechanism (fixed, CPI, market, or a blend) and whether a ratchet clause applies determine how predictable — and how one-directional — your rent movements will be.
Net versus gross outgoings changes your true occupancy cost beyond the headline rent; permitted use defines what you can actually do in the building, now and as the business evolves; make-good determines what it costs you to leave. Security (bank guarantee, deposit or guarantee) ties up capital or contingent liability for the term, and assignment and subleasing rights determine how much flexibility you have if your space needs change before the lease ends.
None of these sit in isolation — a shorter make-good obligation might be worth trading for a slightly higher rent, for instance, depending on how long you expect to stay. Reading the whole lease against how the business is likely to actually use and outgrow the space, rather than clause by clause in isolation, is what turns a standard lease into one that genuinely fits.
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