Landlord Agrees To The Swap

The old space we once gave up we are now swapping with our current warehouse as this move makes financial sense. All I need to do is to confirm the swap deal in writing.

Today I started negotiating the new warehouse rental space which will see us cut around 700 square meters off the existing rental. Last month the idea was put to me my our neighboring tenants on the other side of the firewall who needed more space. I was unsure at the time so I could not give a definitive answer either way as this needed a deeper study.

The economy is struggling nationally and business in general is a battle so when you can reduce your outgoings you do whatever you can. This is definitely not ideal as where is the room for growth? This decision is more about the now and tomorrow can be another problem to solve if needed.

Last week we managed to get rid of a free loading family member whose business was using quite a bit of space which was actually far more than we had initially realised. Roughly 20% of the racking used was taken up by this business which was roughly 400 -500 square meters. When racking is used you don't really get the sense of how many square meters are being used and why he has now been removed we can see the free space.

The firewall is floor to ceiling and is 4 bricks wide which is required for insurance purposes so a fire can be contained. Our space at the time was over 2000 square meters and the fire wall was the cheapest option besides installing a sprinkler system. The firewall cost about 1/10th of what a sprinkler system would have cost.

The obvious move is to just swap spaces with the tenants next door and not knocking a hole through the fire wall which was constructed in July 2024. The firewall was one of our demands due to insurance purposes and cost the land lord a small fortune. My family asked me to negotiate the new rental space without having to move which is a fantasy and was never going to happen. I knew this from the start and knew which option the tight budgeted land lord would favor. Anyone in their right mind would not be knocking chunks out of a wall you built less than 2 years ago.

The start of the building of the firewall back in July 2024.

When I spoke with the land lord this morning I was praying nothing had changed and that the cutting back in rental space was still a go. He was very happy with the discussion and is prepared for us to swap spaces at the end of this month and sign new lease agreements. By doing this we have helped solve a problem he had no answers for and was ecstatic. This is really good news as a 25-30% saving is really a big deal for us. This is not about can this space work for us, but more about making it work.

The move is only next door so with a little planning and communication with next door we could do this over a couple of days without breaking too much sweat. I would keep one 7 x 20m long segment of our existing warehouse which can be made independent by an existing shutter door which would be ideal for trampolines, returns or punch bags. This is a space that has an external entrance so is in my book a smart move to keep as the punch bag business is growing and will update that good news when we can officially announce the last piece of the jigsaw puzzle over the coming weeks.

I had to sell the move to the family telling them that the reality everyone is happy to move and the staying in our existing space was never a starter. The 25% in reduced rental takes the pressure off each month and to think we originally started out with 100% of this building and will have less than 30% in March. This tells me the management of the space is where we need to be and with the savings purchase more racking which could double the stored volume yet again.

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