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Vital factors to consider when entering into a new Lease

2nd March 2023 by Tony Bales

It is essential to consider all the factors when entering into a new lease agreement for industrial property. Once the lease contract has been signed, changing or re-negotiating is challenging.

YouTube video

The following aspects of a property lease transaction are fundamental:

  • ·         Exactly what is being rented? (e.g. Factory/ Warehouse, offices, yard areas, etc.)
  • ·        Are there any areas utilised by other users? (e.g. Shared yard areas).
  • ·         Rentable area of premises. (The most commonly used formula is the SAPOA Method of Measuring Floor Areas.)
  • ·         Exact use of the premises and facilities.
  • ·         Date of Occupation of the property.
  • ·         Lease start date.
  • ·         The period of Lease.
  • ·         Lease End Date.
  • ·         Annual rental escalation.
  • ·         Deposit required. (Deposits are non-vatable).
  • ·         Renewal period (Terms & dates to be agreed upon to be Valid.)
  • ·         Initial Rental. (Excl. Vat)
  • ·         Other costs to be paid by the Tenant? (e.g. Security, Operating Costs).
  • ·         How/ when do these costs escalate?
  • ·         Consumption charges and how and when are these billed (e.g. Electricity, Water, Sewerage etc.)

Additional important items:

  • ·         Obtain Suretyships (if applicable).
  • ·         Any special/other requirements requested by the Tenant?
  • ·         Confirm the tenant’s legal entity to prepare all FICA documentation required by the Landlord.
  • ·         Tenant to permit to consent to a credit check by the agent or the landlord.
  • ·         Acquire Resolutions where companies or trusts are legal entities.
  • ·         What are the Lease/ Administration costs charged for drawing up the contract?

Practical aspects:

  • ·         Power requirements?
  • ·         Height/ stacking and racking requirements.
  • ·         Fire regulation compliance (e.g., Sprinkler systems, etc.).
  • ·         Insurances.
  • ·         Loading, parking, paving, and turning circle requirements.
  • ·         Flooring and lighting.
  • ·         Staff facilities.
  • ·         The timing of a move from previous premises.
  • ·         Finally, cleaning up of former facilities.

If you have any questions or are unsure of any aspect of a transaction, please contact Epping Property for a confidential discussion. It pays to use an experienced industrial property broker to negotiate the best deal possible and to clarify aspects before a lease is signed. There are too many instances where parties, years later, try to decipher what intentions were when a rental agreement was signed.

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Factors to Consider when entering into a new lease
Factors to Consider when Entering into a new lease for industrial premises

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For further information and details, please contact Epping Property.

+27 (0)21-531-0026

www.eppingproperty.co.za

Factors to consider when entering into a new lease

View the latest version of the Epping Property brochure/ newsletter

Mob: +27 76 111 0000

Tel: +27 21 531 0026

E-mail: info@eppingproperty.co.za


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Articles & Documents

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Testimonials

Tafelberg Furnishers

Following a fire at our Epping factory, we decided to reconfigure the business differently and sell the Epping property. Epping Property secured us an excellent transaction to a solid purchaser. We would highly recommend Epping Property as experienced, trustworthy industrial property dealmakers.

Management, Tafelberg Furnishers

Epping Property
2020-01-16T16:01:19+02:00

Management, Tafelberg Furnishers

Following a fire at our Epping factory, we decided to reconfigure the business differently and sell the Epping property. Epping Property secured us an excellent transaction to a solid purchaser. We would highly recommend Epping Property as experienced, trustworthy industrial property dealmakers.
https://www.eppingproperty.co.za/testimonials/management-tafelberg-furnishers/

AVI Ltd

During November we were a little stuck in finding an appropriate warehouse to relocate to. Epping Property did an extensive search in all the central industrial areas. They eventually found our suitable premises and negotiated a deal that both ourselves and the landlord were very happy with.

Management, AVI Ltd

Epping Property
2017-05-08T11:48:22+02:00

Management, AVI Ltd

During November we were a little stuck in finding an appropriate warehouse to relocate to. Epping Property did an extensive search in all the central industrial areas. They eventually found our suitable premises and negotiated a deal that both ourselves and the landlord were very happy with.
https://www.eppingproperty.co.za/testimonials/management-avi-ltd/

Growthpoint Properties

Epping Property reliably assists us in keeping our portfolio in the Central Industrial areas of Cape Town tenanted with good, solid businesses. We can highly recommend anyone looking to rent or to buy property in Epping to deal with the experienced Epping Property team.

Management, Growthpoint Properties

Epping Property
2017-05-08T11:48:51+02:00

Management, Growthpoint Properties

Epping Property reliably assists us in keeping our portfolio in the Central Industrial areas of Cape Town tenanted with good, solid businesses. We can highly recommend anyone looking to rent or to buy property in Epping to deal with the experienced Epping Property team.
https://www.eppingproperty.co.za/testimonials/director-edge-properties/

Truworths Limited

We are exceptionally happy with the purchase of both 22 and 26 Bertie Avenue in Epping. It makes 100% sense for our company to have secured this location. We will now be expanding the warehousing and distribution side of our business onto the properties. Thank you.

Management, Truworths Limited

Epping Property
2017-05-08T11:49:17+02:00

Management, Truworths Limited

We are exceptionally happy with the purchase of both 22 and 26 Bertie Avenue in Epping. It makes 100% sense for our company to have secured this location. We will now be expanding the warehousing and distribution side of our business onto the properties. Thank you.
https://www.eppingproperty.co.za/testimonials/management-truworths-limited/
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