Industrial property

The zoning of any property is crucial if you want to conduct an industrial business. It is the responsibility of the tenant to check that the operation of the business. It is the responsibility of the tenant to check that the operation of the business is appropriate for zoning.

For some industrial businesses being close to a good road network, including freeways and motorways is essential for efficient dispatch and deliveries.

Access to the property might be important for your business and should be considered. For instance, you may need access for large vehicle, containers or large plant or equipment.

If your business will have large vehicles visiting your factory, you may need to get approval from the Roads and Traffic Authority(RTA).

When inspecting factories or warehouses, pay attention to whether the internal clearance and space will suit your business needs.

Check that the services you need for your business are available, such as three-phase power or water treatment.

Office Space

As a general guide, allow 12 to 15 square metres of space for each member of staff. This will allow for an entry area and a meeting room.

The location and type of office can be important. It can enhance or hinder image of your business.

Location can be important to those you work with. Staff members may appreciate convenience. It is usually a good idea to be near facilities such as transport, parking and shops. For some businesses, it is also helpful to be close to other services such as banking,postal,copying or binding.

Make sure the premises are a pleasant place to work. Check the condition carefully. Remember you and your staff may spend a great deal of time in your office. The office environment can even influence whether you attract and retain people.

Location is also important for those you do business with. If you hold meetings with your clients, suppliers or colleagues at your office, it is helpful to them if the premises are convenient to visit.

Check whether the office has other features such as air-conditioning, natural light, parking spaces, lifts, good lift(if necessary), good security, 24 hour access seven days a week or access for people with disabilities.

Car parking may be available but sometimes not included in the lease. In such case, there should be a separate written agreement covering all aspects.

Carefully consider how much it will cost to fit out the office space as this can add a considerable expense to your business.

If you plan to partition your office space, you may need approval from both your landlord and the local Council as your plans will need to comply with the Building Code of Australia.

Also if you plan to put up signs outside the building, you will need approval from your landlord and the local Council.

Retail Property

Unlike other areas of commercial property leasing in New South Wales, there is legislation covering leasing of shops and other retail premises. The retail Leases Act 1994 sets out the leasing retail shops for businesses, landlords and their agents.

The minimum term for retail lease is regarded as 5 years under s.16 the Act (including any option periods.) However as the lessee you can waive this minimum requirement by obtaining a certificate from your solicitor stating that this clause has been explained to you and you have elected to waive this requirement.

It is important to find the right location for your retail business. Think about your customers, including how and where they shop.

Contact local real estate agents to help you in your search for retail premises.

Think about how much space you'll need. Although this can be hard especially if you are starting up in business, it is important to think about the space needed for items such as fittings,equipment, storage etc as well as the display and traffic areas. you'll need enough space when your business grows.


Nearby parking can be a factor in the success of some businesses.

Pedestrian traffic levels can also influence the volume of turnover.

Look at other businesses close to the premises you like and consider their strengths and weaknesses.

If you want to operate a food business, you will need approval from your local Council and in some cases, you may also need approval from the Water Board.

Before Signing a Commercial Lease

Check the proposed lease carefully.

Zoning needs to be checked before you sign the lease. It is up to the tenant to find out whether the business can operate in the leased premises.

Seek guidance from qualified professionals, including legal advice, before signing any lease.

Make sure you understand and agree with the clause in the lease covering the review of rent.This can be based on a set amount or a percentage, or changes in the market, Consumer Price Index changes or the highest of combination of measures (the last does not apply in the case of Retail Leases).

It is also important that the contract covers how and if the lease can be extended by the exercise of an option, as well as how the conditions, including rent, will be reviewed Inspect the condition of the building both internally and externally. If you find something that could be improved, you could ask that this be attended to as part of the negotiations for the lease. Security is important, so investigate the security system and all the factors that will make the premises well protected.

Establish what fittings come with the premises and determine whether the owner or yourself will pay any fit outs that you require.

Premises may come with parking spaces and these should be established as part of the lease.

Check if you need a permit, license or local authority approval to operate your business in the premises. For example to operate a liquor store you are required to lodge an application with Licensing Court where amongst other issues the suitability of the premises is assessed.

Understand all the costs and expenses related to the lease. You may have to pay outgoings as an additional expense.Check these costs, which can be an actual amount or based on a percentage rate. These must be specified in the lease and do not include capital costs. Some examples include repairs and maintenance, security, insurance, local government charges, water rates and land tax.

Sometimes the tenant pays the cost of the preparation of the lease. It is important to check this as part of the negotiations because the tenant can pay both their own and the landlord's legal costs.

If you are buying an existing business, make sure the current lease can be transferred (assigned) to you and that the landlord provides written consent for the assignment. Alternatively you may wish to negotiate a new lease with the landlord. Irrespective of which option is ultimately decided upon you should discuss leasing agreements with your solicitor to ensure you have the appropriate documentation prior to entering into any contract to purchase.

Get professional advice. As well as legal advice, get advice from an accountant on financial matters related to your business, including help with GST.

The tenant will be responsible for all insurances relative to the operation of their own business eg contents, burgulary, public liability etc and may have some obligation in relation to the general insurance requirements of the building depending on the terms of the lease.

Remember, once the lease agreement has been signed, its conditions are binding on both the property owner and the tenant.

The Lease

As there is no common lease for terms exceeding three years, each lease is based on a contract that has been agreed to by both the owner of the property and the tenant. The lease is usually negotiated through a real estate agent. For terms three years and under(including option periods) the Real Estate Institute of New South Wales produces a standard form of Commercial Lease, however, you will need to seek legal advice as to its suitability or amendment for your particular purposes.