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Leasing a warehouse or industrial property in Australia is a significant commercial commitment — one that typically involves longer lease terms, higher outgoings, complex make good obligations, and a regulatory environment that is far more demanding than standard office leasing. Getting the terms right from the outset protects both the landlord's investment and the tenant's ability to operate efficiently. Australian warehouse and industrial leases are commercial leases governed by the general law of contract. Unlike retail leases, they are not subject to the protections of the Retail Leases Act in any state. This means the parties have considerable freedom to negotiate and customise their terms — but it also means there is no statutory safety net for the tenant if the negotiated terms are unfavourable. Key issues in Australian industrial leasing include: the permitted use clause (which must precisely match the tenant's operational needs and comply with local planning zoning); outgoings recovery (industrial leases are typically net leases where the tenant pays all or most outgoings including council rates, insurance, and maintenance); dangerous goods storage (which requires compliance with WHS regulations and Australian Standards); make good obligations (which can be extremely costly for warehouse tenants who have installed mezzanine floors, racking systems, or concrete penetrations); and WHS obligations, where the tenant as the person in control of the premises bears primary responsibility for workplace safety. This template covers all of these provisions in a form suitable for industrial and warehouse premises across all Australian states and territories. Download as PDF or Word.

What Is a Warehouse / Industrial Lease Agreement (Australia)?

A Warehouse and Industrial Lease Agreement is a commercial lease of premises used for manufacturing, storage, logistics, distribution, or other industrial purposes. In Australia, industrial properties — including purpose-built warehouses, logistics facilities, cold stores, manufacturing plants, and mixed-use industrial/office premises — are leased under commercial lease agreements governed by the general law of contract.

Unlike retail leases, warehouse and industrial leases are not subject to the mandatory protections of the Retail Leases Act in any Australian state. This gives both landlords and tenants considerable flexibility to negotiate terms that suit the specific operational requirements of the tenancy — including the permitted use, loading dock arrangements, hardstand access, dangerous goods storage, environmental compliance obligations, and make good requirements. This flexibility also means that tenants have no automatic access to the specialist retail tenancy tribunals or the mandatory disclosure obligations that apply in the retail sector.

The economic scale of industrial leasing in Australia has grown significantly over the past decade, driven by the e-commerce and logistics boom. Large distribution centres, last-mile delivery hubs, and cold chain facilities are among the most sought-after commercial property assets in the country. The lease terms for these facilities are often long — typically 3 to 10 years with options — and involve sophisticated negotiation around rent review mechanisms, outgoings structures, capital expenditure contributions, and make good provisions.

This template is designed to cover the full range of warehouse and industrial tenancy needs, from small owner-operated storage units to large-scale logistics facilities, across all Australian states and territories.

When Do You Need a Warehouse / Industrial Lease Agreement (Australia)?

A Warehouse and Industrial Lease Agreement is required whenever industrial, warehouse, or logistics premises are leased in Australia. The agreement is essential at the commencement of any tenancy, but the investment of time in getting it right pays dividends throughout the entire lease term.

For landlords, the agreement is the primary mechanism for protecting the value of the industrial property. A well-drafted lease protects the landlord's income stream through clear rent review mechanisms, ensures the tenant meets outgoings obligations, limits the landlord's liability for the tenant's operations, and — critically — includes make good obligations that ensure the premises are returned in an acceptable condition at the end of the lease. Industrial premises can sustain significant damage from warehouse operations: forklift damage to floors and walls, racking penetrations in the slab, modifications to sprinkler systems, and chemical contamination from industrial processes. The make good clause is the landlord's primary protection against these risks.

For tenants, the agreement defines the operational parameters of the tenancy. The permitted use clause must be broad enough to cover all current and reasonably foreseeable business activities — a clause that is too narrow can prevent the tenant from adapting their operations as their business evolves. The outgoings obligations must be clearly understood and budgeted — industrial outgoings can be substantial, particularly in modern facilities with sophisticated fire suppression, environmental monitoring, and security systems. And the make good obligations must be costed before the lease is signed, not at the end of the term when it may be too late to budget for them.

The agreement is also needed when an existing industrial tenancy is being renewed, assigned to a new tenant, or sublicensed — each of these events requires a clear written record of the new or varied terms.

What to Include in Your Warehouse / Industrial Lease Agreement (Australia)

The key elements of an Australian Warehouse and Industrial Lease Agreement reflect the unique operational, regulatory, and financial characteristics of industrial property.

Premises description and permitted use: The premises must be precisely described, including the warehouse area (with height clearance), office and amenities area, number and type of loading bays (dock-level and grade-level), hardstand area, and car parking. The permitted use must precisely match the tenant's operations — and must comply with the applicable local planning scheme zoning. Industrial zones in Australia (typically I1 light industrial, I2 general industrial, and I3 heavy industrial under various state planning schemes) have different permitted uses, and operating outside the permitted use is a planning offence as well as a lease breach.

Dangerous goods provisions: If the tenant's operations involve the storage or handling of Class 1–9 dangerous goods, the lease must include specific provisions governing the type, class, and maximum quantity of dangerous goods permitted, the compliance standards required (WHS Regulations, AS 1940, AS/NZS 3833), and the environmental liability allocation between the parties.

Outgoings structure: Industrial leases in Australia are typically fully net — the tenant pays base rent plus all or most outgoings. The precise list of recoverable outgoings, the process for estimating and reconciling outgoings each year, and the exclusions (land tax, structural capital expenditure) must be clearly defined.

Rent review mechanism: A fixed percentage review (typically 3–4% per annum), a CPI-linked review, or a market rent review are the most common mechanisms in the Australian industrial market. The ratchet provision — ensuring rent does not fall below the previous year's level — is standard.

Bank guarantee and security: Industrial landlords typically require a bank guarantee equivalent to 3–6 months' rent as security, rather than (or in addition to) a cash bond.

Make good: The make good obligation is the most heavily negotiated provision in many industrial leases. The scope of make good — whether it requires return to original condition, removal of all fit-out, or merely return to good and tenantable repair — has major cost implications for the tenant and must be clearly specified before the lease is signed.

WHS and environmental compliance: The tenant's primary WHS obligations as the person in control of the premises, and their environmental compliance and remediation liability, must be clearly allocated in the agreement.

Frequently Asked Questions

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