What's the difference between a gross lease and a net lease?

A gross lease bundles outgoings into one rent figure; a net lease bills outgoings separately, on top of a lower headline rent. The total cost can end up similar, so comparing headline rent alone across sites is misleading.

Do I have to remove racking when my lease ends?

If it's bolted into the slab, most industrial leases treat it as a fixture, and the make-good clause reaches it, meaning removal, floor repair and disposal are usually the tenant's responsibility unless the lease specifically says otherwise.

Is a longer lease term always cheaper?

Usually per square metre, because it's less risk for the landlord, but it also locks in your site before you know whether the business will outgrow it. There's no universal right answer; it depends on how confident you are in your own growth.

What should I check before signing on rent reviews?

Which mechanism applies, fixed, CPI-linked or market, when it first applies relative to any option periods, and whether a market review is capped in either direction. Market reviews are the one most likely to produce a genuine surprise.

The Warehouse Lease Clauses That Actually Matter

Most of an industrial lease is boilerplate. Five things in it genuinely change what the space costs and what you're on the hook for when you leave: the term, your options, how rent reviews work, what counts as outgoings, and make-good. Make-good is the one people miss.

Last updated 2026-08-24

Term and options

The initial term sets how long you're committed, and the option periods set how long you can choose to stay beyond that without renegotiating from scratch. A longer initial term usually buys a better rate, because it's less risk for the landlord, but it also locks you into a site before you necessarily know whether your operation will have outgrown it. Options give you the choice to extend without forcing a fresh negotiation, but they're one-sided: the landlord can't force you to leave during an option period, but you're not obliged to exercise it either unless the lease says otherwise.

Getting the length right matters more for a warehouse than for most commercial space, because fitting the space out properly and confirming the building actually suits the operation before signing take real time, and a short term makes that setup cost harder to justify.

Rent review mechanism

Rent doesn't stay flat for the life of a lease, and how it moves is set by the review mechanism, not negotiated fresh each time. Fixed annual increases, a set percentage each year, are the most predictable for budgeting. CPI-linked reviews track inflation but can move less predictably than a fixed figure. Market reviews reset the rent to whatever comparable space is achieving at that point, which is the mechanism most likely to produce a genuine surprise if the market has moved a long way since the lease started.

Knowing which mechanism applies, and when it kicks in relative to your option dates, is worth checking before signing rather than assuming it works the way the last lease you had worked.

Outgoings: what's actually included

Outgoings cover the costs of running the building beyond base rent: council rates, land tax, building insurance, common area maintenance, sometimes management fees. Whether a lease is gross, with outgoings bundled into the rent figure, or net, with outgoings billed separately on top of rent, changes what the headline rent figure actually means, and two leases with the same quoted rent can cost very differently once outgoings are added.

It's worth getting a clear breakdown of what's included before comparing quoted rents across sites, because a lower headline figure with uncapped outgoings can end up costing more than a higher figure that's genuinely all-in.

Make-good: the clause people miss

Make-good requires you to hand the building back in the condition the lease specifies, usually close to how you found it, when the lease ends. For a warehouse, that reaches further than most tenants expect, because racking bolted into the slab counts as a fixture, not equipment you can simply take with you. Removal, patching the anchor holes in the floor, and disposing of whatever isn't being kept are all real costs that almost never make it into the original fit-out budget.

This is the clause worth reading properly before you fit the building out, not on the way out. If the racking configuration you're planning is likely to change again before the lease ends, whether through reconfiguring existing bays or adding to the run, it's worth checking early what the make-good clause actually requires you to restore, because a heavily modified fit-out can mean a bigger job at handback than a simple one.

Reading the lease as a whole

None of these five clauses sits in isolation. A short term with no options is a different risk to a long term with generous ones; a low headline rent with net outgoings and a market rent review can end up costing more over the life of the lease than a higher, all-in gross rent with fixed annual increases. Reading the whole structure together, rather than any single number, is what actually tells you what a lease costs.

It's also worth treating the lease as one input into a wider decision alongside how much genuine choice you actually have in the current market and what the location itself is worth to the business. A great lease on the wrong site, or a mediocre lease on the only site available, are both real outcomes worth weighing honestly.

Common questions

What's the difference between a gross lease and a net lease?: A gross lease bundles outgoings into one rent figure; a net lease bills outgoings separately, on top of a lower headline rent. The total cost can end up similar, so comparing headline rent alone across sites is misleading.
Do I have to remove racking when my lease ends?: If it's bolted into the slab, most industrial leases treat it as a fixture, and the make-good clause reaches it, meaning removal, floor repair and disposal are usually the tenant's responsibility unless the lease specifically says otherwise.
Is a longer lease term always cheaper?: Usually per square metre, because it's less risk for the landlord, but it also locks in your site before you know whether the business will outgrow it. There's no universal right answer; it depends on how confident you are in your own growth.
What should I check before signing on rent reviews?: Which mechanism applies, fixed, CPI-linked or market, when it first applies relative to any option periods, and whether a market review is capped in either direction. Market reviews are the one most likely to produce a genuine surprise.

Part of our guide to finding and leasing a warehouse.