Factories for your Business: to Lease or Buy?

Buisness factory

When it comes to manufacturing, Australia’s rate of producing locally made goods is alarmingly falling across many industries. From retail to automotive, high wages costs combined with free trade agreements or reduced tariffs, the pull to import or manufacture overseas makes financial sense to many companies. However, this is not to say that certain products and brands aren’t making a name for themselves as being proudly Australian made and owned. If you’re thinking of starting a business that will involve manufacturing of some sort, it is highly recommended that you undergo a comprehensive planning strategy to see what type of model will work for you.

If you are savvy, you may be able to access subsidies and other financial incentives to manufacture on Australian shores. Furthermore, your ability to control the quality and cater to an increasingly discerning consumer that seeks locally made goods can be exceptionally lucrative when managed in an efficient way. See below for some tips whether you are looking to lease or buy a factory for sale and how to decide which type of property will suit your requirements.


Starting out, many businesses will opt to lease a premises. This is especially if you are planning to start small and grow into a larger operation over time. If you are working with new technology or products, you’ll most likely produce goods on a smaller scale and therefore seek a smaller space per square metre while you fine tune your offerings to the market. Therefore, when negotiating lease terms, be sure to negotiate a term that suits your business plan. Consider discussing options for future renewal if you are unsure as to the rate of growth you may experience. Another avenue to explore could be to find a location that has room over time to expand into it. This of course, runs the risk that a tenant might snap it up in the future before you get the chance. If you lease and require specialist equipment or fit out, consider a design that is somewhat transportable should you need to relocate in future, otherwise you could get stuck with another pricey fit out upon your departure.


Many businesses will consider purchasing their own factory once they have become profitable and are established for several years (at least). This is especially attractive if you have identified a good business reason to remain in a certain location permanently, or if your method of manufacturing involves heavy or custom equipment that needs to be installed, like we discussed above. Besides checking the zoning of a proposed premises, see if further context can be gained about the area a factory is located in. If manufacturing is in decline more widely, there may be a chance that zoning can be changed over time, or perhaps there will be potential to expand in the future subject to certain overlays being updated one day. Don’t forget to factor into your budget additional time and cash for delays to your business if relocating.