SWhat leasing an industrial building really costs
// hcp LOG · categoryIndustrial Real Estateread7 MIN

What leasing an industrial building really costs

Rent per m² is less than half of what you will pay. The eight components of total occupancy cost and how to compare two quotes without surprises.

The conversation always starts the same way: "what's the rate per square meter?" It is the right question to open with and the worst one to decide on, because rent rarely exceeds half of what you will pay every month.

The eight components

1. Rent

The number everyone compares. Quoted per m² per month and usually indexed to an exchange rate or to inflation. Ask how and when it adjusts: an aggressive annual escalation clause completely changes the three-year cost.

2. Maintenance fee

The charge for the park's common services: security, lighting, green areas, roadway maintenance and, depending on the development, wastewater treatment. It varies enormously between parks and almost never appears in the first quote. Request it in writing.

3. Utilities

Power, water, drainage, connectivity. Electricity is the one that surprises operations involving refrigeration or machinery — and it is where the park's capacity in MVA stops being a technical figure and becomes a financial one.

4. Insurance

Contents and liability. The premium depends directly on the building's fire protection: a facility compliant with NFPA and FM prices differently from one that is not. Sometimes the premium difference offsets much of the rent difference.

5. Property tax and levies

Depending on how the lease is drafted, these can pass through to the tenant. It is a line worth clarifying before signing, not after.

6. Fit-out

Racking, interior electrical work, offices, additional docks, floor coating, signage. This is upfront investment that must be amortized across the lease term to compare it honestly against other options.

And an uncomfortable question: what happens to that fit-out when the lease ends? In many cases it stays.

7. Operation

Staff, forklifts, systems, training, uniforms, internal security. If you operate it yourself, this is your cost. Under an outsourced model it is included in the service rate — which is precisely why comparing "rent vs 3PL rate" without this line always favors rent misleadingly.

8. The cost of empty space

The most invisible one. If you contract for your peak and your operation is seasonal, you are paying for empty square meters several months a year. That cost never appears as its own invoice line, but it is there.

The comparison formula

Monthly occupancy cost =
    rent
  + maintenance fee
  + utilities
  + insurance
  + property tax passed through
  + (fit-out / lease months)
  + operating cost

Then, the question that organizes everything: divide that total by the pallet positions you will actually occupy in an average month. That figure — cost per occupied position — is the only one that lets you compare a leased building, a 3PL service and a flexible rental on equal terms.

Why the comparison is usually skewed

Because people compare a building's rent against a logistics operator's full rate. They are different things: the operator's rate already includes staff, equipment, systems and utilities; rent includes none of that.

Once the comparison is complete, the crossover point sits much higher than most expect.

Three questions before signing

  1. What is the itemized total occupancy cost? If the landlord will not put it in writing, that silence is already information.
  2. How does rent escalate? Index, frequency and cap.
  3. What if I need more or less space? Adjacent availability, early exit terms, and what happens to the fit-out.

Alternatives to fixed area

If your volume is not flat all year, there are models that avoid paying the peak twelve months:

Available at San Luis Potosí and Querétaro, where the Querétaro park publishes 5 MVA of electrical capacity and a 2 l/s treatment plant — figures worth having in writing in any comparison.

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#Occupancy cost#Industrial building#Lease#Budgeting

// Author

Editorial team

Hau Can Park

Operations team at Hau Can Park, operators of logistics parks in San Luis Potosí and Querétaro, Mexico.

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