You're about to buy a tenanted warehouse somewhere between Laverton and Lara, and on paper it looks solid. The building is sound, the tenant pays on time, and the yield on the flyer stacks up nicely. But here's the part most buyers skip. The building is only half the asset. The lease sitting behind it is the other half, and if you don't read it properly before you sign, you could be locking yourself into someone else's problem for the next five to ten years.
Why the lease is the real asset you're buying
When you buy a tenanted industrial property, you're not really buying bricks, steel and concrete. You're buying an income stream, and that income stream is defined entirely by the lease document, not the marketing brochure. Two identical warehouses on the same road can be worth very different amounts depending on what's written into the fine print. A weak lease with vague clauses and an unmotivated tenant can turn a good building into a headache. A strong lease with clear terms can carry a mediocre building for years.
A tenanted warehouse is only as strong as the lease that sits behind it, not the shed it's written on.
The clauses that decide your return
Where buyers get caught out
Rent reviews, options and what they mean for your yield
The timing and structure of rent reviews will shape your actual return far more than the headline yield on day one. A market review clause sounds attractive until you realise it can work against you as easily as for you, depending on where rents sit locally at that point in time. Industrial rents across Melbourne's western corridor have moved meaningfully in recent years, which makes understanding your specific review mechanism even more important before you commit.
Read the lease like you're the one signing it as tenant, not just the one collecting the rent.
Outgoings, make good and the costs nobody mentions
A fully net lease looks clean on the surface, but always confirm which costs genuinely pass through to the tenant and which remain your responsibility as owner. Land tax treatment, capital works, structural repairs and essential safety measures are common areas where landlords discover they're carrying more than they expected. Vacancy risk in the western industrial market has generally remained tight compared to other asset classes, but a poorly structured lease can still turn a good asset into a costly one at renewal time.
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Fairmont only sells and leases industrial property across Melbourne's western corridor and Geelong. That focus is deliberate. It means we know the buyers who are active right now and what they are prepared to pay.