Lease renewals and negotiations

Renegotiating a lease is a business-critical event which can sit at the heart of your commercial strategy.

Getting the lease terms right can have significant benefits for you as a tenant. Equally, failure to achieve the best terms can result in potentially disastrous business outcomes for tenants, due to lack of flexibility and financial pressure.

Many companies think that it’s straightforward to negotiate a renewal directly with the landlord. However, the property market has changed since you last signed a lease and both landlord and tenant now have different objectives. Ultimately, the landlord’s priority is always to maximise his return on investment (ROI), which can be achieved through securing a high rent bill and via restrictive clauses in the lease.

There is a proven benefit in being represented at negotiation to ensure the best rental terms are achieved and in concern over removing restrictive clauses and to reduce the headline rents based on strong comparable evidence and data to support negotiations.

The results of being represented will benefit your business objectives and decrease any future risk.

The first stage to tackle a lease renewal is to be aware of what the renewal would ‘cost’ the business. For example, an extra £7.50 per sq ft on 5,000 sq ft for a 5 year term will cost a tenant another £187,500. This may require a substantial increase in turnover to cover these additional costs. Can you imagine the impact on your business if the rent increases by £10 or £12 per sq ft?

To find out more about how Aspire can help you with lease renewals and negotiations, contact us here

or phone 020 3627 2555

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