Two key labour developments are affecting warehouse occupiers’ cost bases and covenant strength:
- The forthcoming Employment Rights Bill introduces rights for regular agency and zero-hour staff to request guaranteed hours, likely to increase fixed employment costs.
- Wage inflation continues, with the National Living Wage now at £12.21 per hour (21+) and employer NI thresholds tightened.
For landlords, we are already seeing these rising costs translating into higher demands for lease flexibility, shorter terms, or turnover-linked rent mechanisms — especially in high-labour environments such as last-mile fulfilment and seasonal warehousing. Understanding tenant business models and covenant resilience remains critical.
Trowers is developing its standard I&L suite of precedents so that an off the shelf "flex model" is available to our investor clients – and limited to 10 pages!
