Leases for logistics properties: what to consider

Lease term and flexibility

Due to the high dynamics of the logistics sector, comparatively short lease terms are common in the market. A large proportion of tenant companies themselves only conclude short- to medium-term service contracts with their clients and are therefore economically dependent on manageable lease durations. Lease terms are often one to five years for existing properties and five to ten years for new builds. It is important during lease negotiations to consider potential extension options from the outset. These options provide flexibility to respond to market changes.

In this context, termination notice periods should also be adapted to the lease structure and clearly defined. For commercial premises, the statutory notice period is generally six months to the end of a quarter, although individual contractual arrangements are possible and, in some cases, economically necessary.

Calculation of usable space in logistics

Logistics properties are a very space-intensive asset class, where inaccuracies in floor area calculation can quickly lead to unnecessary costs or loss of income. Therefore, the rented area should be precisely defined for both parties. The method used to calculate the rental space should be clearly specified in the lease agreement to avoid disputes later on. DIN 277 is often used to determine the rental area.

Operating costs and maintenance for logistics properties

In logistics properties, double-net (NN) leases are often used. Under such agreements, the tenant pays the base rent plus ongoing operating costs, such as property taxes, building security, administrative costs, and routine maintenance. The landlord remains responsible for the costs of the “roof and shell”, meaning the roof structure including roofing, as well as the load-bearing walls, including the building’s exterior façade.

A roof-and-shell clause ensures that essential building components are properly maintained, which protects the long-term value of the property. For the tenant, this clause provides some relief, as they are not responsible for costly structural repairs. Due to this arrangement, triple-net (NNN) leases, where the tenant assumes maintenance costs, are less commonly used. However, if the goal is to keep the monthly rent as low as possible, this option can be advantageous.

Additionally, lease negotiations require a detailed breakdown of operating costs to prevent disputes. Both the operating costs and the allocation keys should be clearly defined for both parties.

Special requirements for technical building equipment

In certain business sectors, logistics properties may be subject to specific technical requirements. For example, secure storage facilities for the storage and handling of cigarettes must comply with particular burglary protection standards. In pharmaceutical and chemical logistics, controlling temperature and humidity plays a critical role.

These requirements should be precisely recorded in the lease agreement, clearly specifying who is responsible for installation, operation, and, if applicable, dismantling. At the same time, this defines responsibilities for compliance with required standards and any related additions to operating costs.

Safety and environmental requirements in lease agreements

Given the commercial storage of large quantities of goods, safety regulations are a central concern in logistics properties. As indicated under technical requirements, the lease agreement must ensure compliance with all legal provisions, including fire protection, safety measures, and any necessary environmental protection regulations.

This also includes regulations for hazardous materials, if they are stored on the premises. For example, the storage volume of lithium-ion batteries has increased significantly in recent years. Special attention must be paid to this type of hazardous material, as its specific properties—particularly regarding fire safety—require additional precautionary measures.

Legal framework, permits, and regulations

After final agreements between the parties, all necessary official permits for the intended use of the property must be obtained. This also includes specific regulations for hazardous materials storage or other industry-specific requirements.

By taking these specific aspects into account, both landlords and tenants of logistics properties can ensure that their leases meet market requirements and help avoid potential conflicts.