Logistics leases are long - typically <b>5 to 10 years</b>, and 10-15 for build-to-suit - which changes the negotiation entirely. Over that term the headline rent moves less than the package around it, and a few months of rent-free or a capped indexation clause is worth far more than shaving €0.10 off the €/m². Here are the levers, in order of value, and what earns them.
The levers, most valuable first
- Rent-free period. On a 5-10 year logistics lease, expect several months rent-free to offset your move and racking install; the longer the term, the more months. This is usually the single most valuable concession.
- Fit-out / racking contribution. A cash contribution or works from the landlord toward racking, a mezzanine, dock equipment or office fit-out. On a long lease landlords will often fund part of this to secure the tenant.
- Break option. A right to exit early on a set date (say year 5 of a 10-year lease) without penalty - cheap insurance if your volumes are uncertain.
- Service-charge cap. A ceiling on the annual estate service charge so a triple-net lease cannot drift upward uncontrollably.
- Indexation cap. A limit on the annual inflation-linked rent increase (for example, capped at 3-4% however high inflation goes), which protects you over a 10-year term.
What gives a tenant leverage
Lease length — A longer commitment is worth more to the landlord, so it buys more rent-free and a bigger contribution. This is the tenant's main bargaining chip.
Covenant strength — A financially strong, well-known tenant lowers the landlord's risk and unlocks better terms and rent.
Market vacancy — When there is empty stock in the submarket, incentives rise; in a tight market they shrink. Know the vacancy rate before you open.
Speculative vs let space — A newly built speculative unit sitting empty is far more negotiable than one with competing tenants circling.
How the incentives add up
Judge an offer on the net effective rent - the headline rent averaged out after the rent-free months and contributions are spread across the term - not the headline figure. Two units at the same €5.40/m² are not equal if one throws in four extra months rent-free and a racking contribution. Model total cost over the full term before you compare, and cross-check the headline against the market rents.
What to negotiate on a long logistics lease
Rent-free — Several months, scaling with term
Racking / fit-out contribution — Cash or works from the landlord
Break option — e.g. at year 5 of a 10-year term
Service-charge cap — Ceiling on annual estate charge
Indexation cap — e.g. annual increase capped at 3-4%
