How should industrial funds approach rent reviews to maximise income?
Industrial funds maximise income at rent review by knowing exactly what the review clause allows (open market, fixed uplift or index-linked), building comparable evidence early, and understanding the tenant's position: how costly a move would be for its operation and how many other businesses the unit could suit. Scayled does not value rent or assess tenants. Where a review falls close to a break or expiry, it answers the last point: it finds 250 to 350 businesses the building suits and the person who signs at each, so the fund knows its options.
- What types of rent review do industrial leases use?
- How do you build the evidence for an open market review?
- How does the tenant's position affect the outcome?
- When should a fund prepare an alternative tenant during a review?
- Which tools support rent review work?
- What does Scayled cost?
What types of rent review do industrial leases use?
Three main types. Open market reviews reset rent to market value on set dates, and in the UK they are often upward only. Fixed uplifts, a set percentage each year, are common in US and Australian industrial leases. Index-linked reviews follow CPI or RPI, often with a collar and cap that set a minimum and maximum increase.
Read the clause before anything else. The review date, the assumptions and disregards in an open market review, any time limits, and the dispute route (arbitrator or independent expert in the UK) decide what the landlord can actually achieve.
How do you build the evidence for an open market review?
Collect comparable lettings for similar units: size, eaves height, yard, power, location and lease terms. CoStar, agency research and the agents active in the submarket are the usual sources, and a valuer or surveyor typically prepares the case. Adjust each comparable for incentives so headline rents are compared on a net effective basis.
Start early. Evidence takes time to gather and agree, and a review settled near the review date is easier to manage than one that drifts into a dispute.
How does the tenant's position affect the outcome?
In an open market review the hypothetical tenant matters more than the real one, but the real tenant's position shapes how hard it negotiates and whether the relationship holds. Relocating an industrial operation is expensive, with racking, power, staff and customer routes to move, which usually favours settling.
That changes when the review falls close to a break or expiry. Then a high review can become the reason the tenant leaves, and the landlord has to weigh the uplift against the cost of a void.
When should a fund prepare an alternative tenant during a review?
When the review sits near a break or expiry, when the tenant has said it might leave, or when the passing rent is well below market and the fund would rather re-let at market than settle low. In each case the fund needs to know who else could take the unit before deciding how hard to push.
Scayled builds that list. It assembles the businesses whose operation the unit fits, 250 to 350 on a Full campaign, with the decision-maker at each and an email ready. Because the fund sends the emails, it controls who hears about the unit: the sitting tenant stays off the list and nothing is listed publicly.
Which tools support rent review work?
Yardi or MRI hold review dates and notice requirements as critical dates. ARGUS Enterprise models the review outcome and its effect on value. CoStar and agency research supply comparables. Valuers and surveyors prepare and argue the case.
Scayled is not a valuation or rent review tool. It is relevant only where the review could turn into a vacancy, and then its role is to fill that vacancy.
What does Scayled cost?
Where a review could turn into a vacancy, the fund can run The Campaign on the unit: from US$449 for a Focused list of the strongest 100 to 150 businesses, often enough to know the options, or US$749 for the Full 250 to 350. It is one payment with no subscription and no commission, and it works alongside any appointed agent.
The emails are written as the owner and land in the fund's own drafts. If the review does end in a departure, finding a tenant for a vacant industrial unit picks up from there.
Lease The Vacancy In-House, Before You Appoint An Agent.
The Campaign finds the 250 to 350 businesses the building suits, names the person who decides at each and writes every email, ready in about five days. One payment of US$749 per property, no commission and no subscription. A focused 100 to 150 from US$449.