How to successfully negotiate a warehouse lease contract and achieve low rates of rent? A JLL expert's advice

The process of negotiating the terms of the warehouse space lease contract is based on several important factors, the most important is the knowledge about the market. In large contracts, negotiations can yield savings of hundreds of thousands of euros per year. [VIDEO]

Dynamic changes in ownership and the continued activity of developers contribute to creating new opportunities for rental. However, without being aware of these opportunities, the tenant will not be able to conclude negotiations to their full potential.

Tomasz Mika, Head of Industrial, Poland, JLL gives examples of good practice and shows how to negotiate successfully. What guarantees effective negotiations of warehouse space lease terms?

Tomasz Mika, JLL: Each warehouse lease transaction requires a well- considered and pre-arranged strategy. It is especially relevant when we are talking about large deals of

10 000 sq m upwards. Adopting this approach can result in attaining accurate cost saving projections that can translate into tens and sometimes hundreds of thousands of euros per year.

How does this process work?

The optimal negotiation time on the terms of a warehouse space lease contract is approx. 12 months.

The first two months are devoted to analysing the situation of tenants and to clarify the tenant’s needs. During the analysis, a number of factors are taken into account, such as location and road infrastructure. This period may be considerably reduced when the tenant has clearly defined needs.

After the analysis, an enquiry is prepared and sent to selected developers. The accepted offers are compared to the proposed commercial and technical terms.

The next step is examining the proposed locations, and meetings with owners that will allow tenants to familiarize themselves with the submitted offers, get answers to their questions and explain any inconsistencies.

What's next?

Continue to follow negotiations of the terms of lease and create a short list of the best warehousing solutions. This is the crucial moment in the whole process. It is now time for a detailed analysis of the selected proposals, and the planning of the warehouse, the location of the gates, docks ,the pre-arrangement of the office and social space.

What happens when the tenant together with advisors select an offer and location?

After the selection of the final location the tenant and the landlord work on the content of the lease agreement. The talks are aimed at transferring certain conditions of the agreement onto paper.

The talks often result in a letter of intent confirming all the concluded arrangements.

Is signing a letter of intent an essential element?

No, but it is recommended.

The contract closes the negotiation process?

Yes. The finalization of the lease is the final step. Legal advisors then work towards ensuring the negotiated terms.

This is an extremely important moment, because the signed agreement must leave nothing open to interpretation.

Can a negotiation process succeed without the help of advisors?

The tenant who wishes to rent a warehouse or industrial space should be aware of the complexity of the process. Negotiations, as part of a strategy is developed and run in stages However, these stages can quickly change in content or become more urgent and so it is vital for someone who is experienced to control this situation

The outcome of the negotiations depends on whether the lease of the warehouse space will positively influence the business development of the tenants, whether the client optimally uses a planned budget for the project and whether he or she will be satisfied with the use of the property for the duration of the contract.

Consultants have years of experience in the field of warehouse lease transactions and negotiations, allowing them to achieve themost attractive rents.  In the negotiation process the key to success is experience and knowledge.

Tomasz Mika


Central Poland. The most popular region in the country


The region which was the most sought-after by tenants in Q2 2017 was Central Poland, where deals were signed for a total of 282,000 m², which was some 43% of net take-up. Due to having such a high share last quarter, Central Poland also became the leader in the first half of 2017, overtaking Upper Silesia, Warsaw (both the Suburbs and the Inner City zones) and Wrocław. What makes Central Poland so popular?

Automation in warehouses


In the recent years, automation has become increasingly common in the warehouse industry. “Automation solutions are being implemented in all those industries where it is desirable to accelerate and optimise logistics processes. They can be seen as an obvious step in the development of every company,” says Ludwika Korzeniowska, Business Development Manager, JLL.

Szczecin – a logistics-friendly city


Szczecin is still an unsaturated market. A noticeable trend in the region is the increasing activity of investors from Scandinavia. What does Szczecin have to offer as an investment location? The participants of the conference “Szczecin – a logistics-friendly city” have looked for the answer to this question.

Companies are looking for locations with easy access to workforce


“The availability of workforce has become one of the key factors affecting tenants’ choice of locations for industrial and warehouse investments,” says Tomasz Olszewski, Regional Director, JLL. However, finding employees proves increasingly challenging. According to the Central Statistical Office, in April this year 7.7 percent of Poles were unemployed. Poland has not seen an unemployment rate this low for more than 20 years.