Dominique Lamb Message spend

Before the busy Christmas season gets underway, now is a good chance to reassess your leasing arrangements.

Rent is one of the most significant costs for anyone running a retail business, and paying the right amount for your business can greatly affect its success. The good news is that there are options available to assist you in reducing this burden and it’s worth taking the time to fully explore ways to cut back on overhead expenses.

If you’re relocating to another premise or expanding your number of stores, it’s important to remember that retailers should never pay the recommended rent price. Most lessees, particularly new business owners, are understandably eager to get their business underway and just assume the recommended rent price is the best they can get. But this quoted price should just be seen as a starting point in rental negotiations rather than a final offer, and should be based off what an owner can afford.

Getting specialist advice on what sort of arrangement will work best for your business should be the first step before signing a lease. An expert in the field can accurately predict how factors such as foot traffic and consumer confidence can impact a business when entering into a new lease.

If you are already committed to a lease and you believe your rental overheads are too high, there is still an opportunity to alter the terms. A “lease event”, like market rent reviews, lease renewals or tenancy dispute, provides retailers an opportunity to adjust lease terms in line with the performance of the business. Each lease contains a section on base rent and rent reviews, which outlines the processes and timings on how to obtain better rental terms. Again, make sure you obtain expert advice to get an accurate picture on all available options and to assist with the negotiations.

But even if there is no provision in the lease agreement, you can still discuss a rental review. Although a landlord can insist that you meet all contract obligations, if the alternative is your business having to be shut down midway through the term of the contract, this provides them with an incentive to explore either a temporary or permanent rental adjustment. In this instance, it’s important to provide the landlord with all necessary information to persuade them to provide a temporary rent relief until the business gets back up on its feet, such as detailed sales history information if there’s been a major discrepancy in turnover.

It’s a challenging time for retail, with many of you looking for ways to boost sales. However,

it’s important to remember that there are options available when it comes to improving your leasing arrangements to cut back on costs.

If you have any questions regarding your leasing arrangements, don’t hesitate to contact the NRA team on 1800 738 245.

All the best for the week ahead!