Service chargé is generally a lower cost than the rent itself, but in today’s reality it is increasingly important. Usually, the tenant has no influence on changing the amount of these fees, but it is important for him to be aware that the provisions in the lease regarding them can and even should be subject to negotiation.

What is included in service charges?

The maintenance fees include all services related to the maintenance of the warehouse facility, such as: taxes and public fees, facility management fee, insurance costs and the cost of maintaining the common areas of the park (including: snow removal, cleaning, security, maintenance and upkeep of buildings, transmission systems, fire system, inspections required by regulations, care of outdoor areas, etc.).

As a rule, the range of service fees is very similar for most of the leading developers on the market. At this point, the largest share of these fees mostly consists of taxes (it is about 50%). The second most weighted component of SCH (about 30%) is the costs arising from the maintenance of common areas – it is this component that is most often raised during lease negotiations, since the landlord has by far the greatest influence on their amount (by deciding on the choice of facility manager, subcontractors and materials used). The management fee, on the other hand, is relatively easy to predict, as it mostly relates to the base rent for the lease and is usually around 3% of its annual amount. As for insurance-related costs, they include all-risk insurance for the building at full value (including rent loss insurance) and landlord’s liability insurance.

As a standard in the A-class warehouse market, the open book billing method is used. This means that the charges incurred monthly by the tenant are advance payments, and therefore the rate initially presented by the landlord in the offer, is only an estimate of such costs and in the end may change. It is worth bearing in mind, however, that these fees are not part of the landlord’s earnings, so they must be charged transparently and the tenant must have the right to inspect them.