When inspecting industrial land to assess its potential for sale, lease or development, it is wise to do so with a clear set of guidelines. A checklist for the purpose is very helpful and will identify you as the professional real estate agent or broker.
What to Look for in Industrial Property
Some of the key issues of industrial properties are detailed below to help you on this path.
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- Levels of the site: Industrial land is desirable if it is to a large degree level. Slopes of greater than 5% create problems of usage for the occupant. Sloping industrial land will, therefore, have to be levelled off and that will incur a cost of development.
- Access to raw materials: Industrial tenants and businesses need access to the raw materials related to their business. Your knowledge of the region will help you understand the types of tenants best suited to the location given the raw materials available.
- Access to a convenient labour force: industrial tenants need labour as part of their activities, therefore the proximity to towns and transport is essential for labour force supply. The travelling time and convenience of transport for workers on the property need to be assessed. As a standard for industrial property, it is usual that a convenient industrial property precinct will be within 30 minutes of a town or reliable source of labour.
- Services and Utilities: Industrial tenants need a variety of utilities such as kerbed bitumen road access, water, power (3 phase), waste disposal, sewer, and gas for a satisfactory function of their business. It is important to understand what utilities are available in the region and how necessary they are for industrial tenants in occupation. Naturally different businesses will require utilities and services in different ways. Your assessment of the industrial precinct is therefore essential.
- Stability of the land: industrial land is to be stable firstly for the requirements of construction and secondly for the movement of vehicles. It is normally necessary and practical to undertake a soil report across the gross allotment of vacant land when considering its application as an industrial site.
- Hardstand: the use and requirement of ‘hard stand’ areas on the property are of great advantage for motor vehicles, trucks, and other aspects of industrial storage. Local councils require the complete containment of the industrial business operation from the property. This means that an industrial site incorporating a balance of good quality fixed improvements such as sheds, offices, and car parking, together with ample ‘hard stand’ areas is highly desirable.
- Fencing and Security: the industrial site needs to be well fenced and secured. Given that the industrial property areas are usually remote to the local community, considerations need to be made in how the site can be secured.
- Risks associated with the site: when looking at industrial land it pays to look at the greater total precinct for potential risks. This can be land slippage, flooding, cyclones, earthquakes, and environmental pollution. Consider the risk frequency potential and then identify how the property could address the issue. There are experts in this field that can help you.
- Access to the site: road access to the industrial premises must be convenient and practical. It is vital that delivery vehicles can easily access the site at all times. Main road locations with high volumes of passing traffic can, therefore, offer logistical problems for transport and deliveries to the industrial premises. It is better to have an industrial property located in a secondary road adjacent to main traffic corridors.
- Turnaround space: the land internal to the property needs to have enough space for transport vehicles to easily make deliveries and then turnaround for exiting the property. The more effectively this can be achieved, the less downtime is incurred by the business occupant in delivering essential raw materials and shipping product from the property. Consider the full balance of storage, loading, and car parking capabilities of the industrial property in any inspection process.
- Compatibility with neighbouring properties: it is quite important that the industrial tenant or property owner is totally compatible with the surrounding precinct. This includes both the neighbouring businesses and the greater community. Any mismatch of property occupant to the precinct will frustrate industrial operations and therefore rental or property prices achieved from the occupation.
- Car parking: the need for ample onsite car parking is an essential part of industrial property design and function. The staff and the customers to the business should be able to park on the property rather than on the street. This means that industrial property with significant onsite parking will be much more desirable from a leasing and selling perspective.
- Signage: many industrial tenants require some form of corporate signage to identify their property and activities to customers. It is a matter of checking the signage rules and regulations that apply to property in the relative industrial area. Your local council or building authority is the best place to start with this.
- Communications: whilst communications can be regarded as a standard utility for many tenants and businesses, it is also a singularly important element of business function. Some industrial parks and precincts, therefore, have access to world-class communications facilities such as digital telephone, comprehensive mobile phone facilities, and fast cable Internet links. Further aspects of communication can include radio and communication towers for links to remote sites or telephone or data exchanges. See what the tenants in the area could need and know what is available.
- Transport facilities: every town and city will have major transport facilities such as ports, railheads, and airports. The proximity of the industrial area to these locations is important for industrial business function, deliveries, and exports. What is the best transport method of goods to the transport facilities and how easy is it to achieve 24/7?
- Environmental: whilst some comments have been made earlier regards risk on the property, the topic of environmental impact also stands alone as a key issue in the location and usage of the industrial property. Some tenants will generate elements of pollution, noise, and visual impact. These matters need to be considered with every potential new tenancy and the appropriate restriction applied in any lease occupancy document.
- Improvements: the industrial property will feature industrial type improvements such as warehouses, sheds, offices, car parks, hardstand areas, and open space. These need to be assessed for age, deterioration, practicality, serviceability, and future usage. Given that transport is a critical part of industrial property usage, the dimensions and dynamics of all the improvements should also be assessed in balance with the needs of modern transport trucks and vehicles.
- Buffer zones: Industrial precincts and properties are increasingly buffered from impacting on the greater surrounding community. These buffers are typically incorporating vegetation and road design elements. They are regarded as a positive aspect of industrial property and precinct function.
So these are some of the key issues relating to the characteristics of industrial property. You can (and we recommend) that you incorporate them into your listing and property assessment process. You can also add to the list relative other elements of your local precinct that impact your industrial property sales and leasing activities.