When businesses require extra space, one of the biggest financial decisions they face is whether to lease an existing industrial shed or invest in building their own commercial shed. The right choice depends on a range of factors, including upfront costs, long-term financial returns, land availability, operational flexibility, and business growth plans. To help you navigate your decision, since both options come with distinct advantages and cost implications, this article explores the cost-effectiveness of leasing vs building, outlining financial factors and key considerations. Should you take a lease on commercial property? Leasing is an appealing option, especially when you have less capital to invest upfront. It is also a good choice if you aren’t clear on your business goals because you can easily relocate as required. However, leasing directs a large amount of business capital to rent instead of accruing asset ownership. Leasing also requires sacrificing an element of control to your landlord. If you want to adapt your premises to your operations or acquire more assets, we recommend owning the space instead. Should you buy a commercial property? As an owner-occupier, you are your own landlord. That means you’re responsible for managing the property maintenance but you can also conduct this in a way that suits you. However, when buying an existing commercial property, you will need to operate within the constraints of the existing space. If you are investing in owning property, you may be better to build new. Should you build a commercial property? When you build new commercial premises, you can customise the construction and facilities to suit your unique operational needs. This is well worth the investment, enabling you to operate in the way that suits you best, rather than adjusting your processes to fit an existing space. What’s more — you’ll own a valuable asset! Discover pros and cons of leasing vs building in below blog article: Crunching the numbers: lease vs build Deciding whether to lease or build an industrial shed comes down to some key financial factors: Lease rates in your region – high rental costs can make ownership more attractive. Land and construction costs – prices vary by location and materials. Financing and loan interest rates – lower interest rates can improve affordability. Business growth plans – owning provides stability, while leasing offers flexibility. Lease vs build comparison Factor Leasing a commercial shed or industrial building Building a commercial shed or industrial building Initial cost Low (bond + initial rent) High (land + construction) Ongoing expenses Monthly rent increases Maintenance + loan repayments Customisation Limited Fully customisable Long-term savings No ownership benefits Builds equity, potential appreciation Tax benefits Limited deductions Depreciation + deductions Time to occupy Immediate Several months Flexibility Easier to relocate Permanent location If your business is committed to long-term stability and operational control, building a custom commercial shed or industrial building may be the better choice. Below, you will find all considerations above in detail to make the right decision. The benefits of commercial shed construction The ability to design your new building to suit your unique specifications offers unparalleled advantages. Long-term cost savings While the upfront cost of building is higher, owning a facility eliminates ongoing lease expenses and protects against rising rental rates. Building ownership also removes uncertainties tied to rental agreements, allowing businesses to manage costs more predictably. Modern infrastructure A new commercial property has more up-to-date infrastructure, technology, and energy efficiency. This reduces maintenance costs and allows you to redirect that money to your business. Asset ownership and equity growth A business that owns its property builds equity over time, meaning the asset can appreciate in value and provide financial security. With strategic design and features, you can increase the functionality and market value. Adaptability With your own building, future growth is in your hands. You can freely plan for future extensions or renovations without needing to negotiate with a landlord or third party. Customisation Building new commercial premises allows you to tailor the space to your needs. This is generally far more cost-effective than adjusting an existing building. With a new building, you can integrate features that suit your specific operations, such as: Custom bay sizes Internal walls and office fixtures Mezzanines Gantry cranes Roller doors and sliding doors Firewalls Considerations of building a new commercial building Although it offers several advantages to businesses, building may not be right for everyone. Below are the key factors to consider: Can be time-consuming Industrial shed construction can be time-consuming and prone to weather delays and regulatory approvals. However, you can mitigate this by opting for prefabricated components and a kitset shed frame. Can be harder to access finance Banks see construction as risky so it may be harder to obtain the funds you need. However, this can be made easier with a fixed price quote, including everything from start to finish. At ABC Sheds, we specialise in constructing large, durable commercial and industrial buildings. Whether for industrial manufacturing, retail operations, warehousing or any other purpose, we will work with you to create a space that supports your next steps. From design to delivery, we’re with you every step. If you have specific requirements in mind, ask our friendly team to discuss your options. For more ideas and considerations, download our free Commercial Property Investment Guide. Inside, you’ll find everything you need to make an informed decision.
Is it cheaper to lease or invest in commercial shed construction?
When businesses require extra space, one of the biggest financial decisions they face is whether to ...
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