What is a void period, and why does it matter so much in industrial property?
A void period is the time a commercial unit sits empty between one tenancy ending and the next starting, when the landlord collects no rent but still carries costs such as property taxes or business rates, insurance, security and any service charge shortfall. It matters most in industrial property because many units are single-let, so a void can take an asset's whole income to zero at once. Scayled works on the length of the void: it finds 250 to 350 businesses a vacant or soon-vacant unit suits, names the person who signs at each, and drafts the approach.
- What is a void period in commercial property?
- What does a void period cost a landlord?
- Why are industrial voids so costly?
- How long does an industrial void period last?
- How do landlords shorten a void period?
- How does Scayled help with a void period?
What is a void period in commercial property?
A void period is the stretch between the end of one tenancy and the start of the next, when the unit earns no rent. It starts when the outgoing tenant hands the unit back and ends when a new lease starts or rent begins, which can be later still if the new tenant has a rent-free period.
Valuers build an expected void, often called downtime, into cash flows for every lease that might not renew. The actual void can be shorter or longer depending on the market and how the re-letting is run.
What does a void period cost a landlord?
Lost rent, plus the outgoings the tenant used to pay: property taxes or business rates (in England, empty rates apply once any relief period ends, usually six months for industrial premises), insurance, security, utilities, maintenance and any service charge shortfall on a multi-let estate.
Then the cost of re-letting: refurbishment, agent fees, legal fees and the incentive a new tenant needs. A long void also tends to weaken the landlord's position in the deal that ends it, and it reduces value while the asset has no income.
Why are industrial voids so costly?
Many industrial assets are single-let, so one departure removes all of the asset's income rather than a share of it. Units are large, so both the lost rent and the holding costs are large in absolute terms.
Specialised or oversized units suit fewer businesses, which can lengthen the search. And for a fund, a void reaches investors through lower distributions and, at the next valuation, a lower value.
How long does an industrial void period last?
It varies widely. The main drivers are submarket vacancy, how well the unit's specification matches local demand, its condition and asking rent, and when the search for the next tenant began. A modern unit in a tight market can let before the outgoing tenant leaves; a dated or specialised one in a loose market can sit empty far longer.
Because the timing of the search is the driver the landlord controls, starting before handback is the most reliable way to shorten a void.
How do landlords shorten a void period?
Start early, settle condition and refurbishment before handback, price the unit to the market, and use every route to the next tenant: an agent, listing portals such as LoopNet, Crexi, realcommercial.com.au or Rightmove, a signboard, and a direct approach to businesses the unit suits.
The direct approach reaches businesses that are not searching yet, which listings and requirement lists cannot.
How does Scayled help with a void period?
Scayled runs the direct approach. Rather than waiting for enquiries, it finds the 250 to 350 businesses a void unit suits, gives the fund the person who decides at each, and drafts a personal email arguing the case for the building.
A void is shortened one unit at a time, and The Campaign is priced that way: US$749 for the Full 250 to 350 businesses, about five working days, or from US$449 for the strongest 100 to 150, about three. One payment, no subscription, no commission, and it runs alongside any appointed agent. For landlords running the letting themselves, how to find a tenant for a vacant industrial unit sets out the full process.
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.