‘Buying’ Leasing Retail Space for summer – Christmas 2009
‘Buying’, leasing retail space for summer – Christmas 2009, now is a good time.
Great deals are being done and there to be done.
Base starting rents in some centres have been substantially discounted.
Fit-out contributions are high, lease terms are negotiable CPI only or low fixed increases available.
In line with the recent ARA survey our recommendation is to go for Gross Leases with a lease term period negotiated to fully recover fit-out costs.
No declaration of sales where possible unless the sole basis of the lease is a gross % rent which can rise and fall in relation to the retailer’s sales.
No refurbishment clauses during the term of the lease.
No relocation or demolition clauses unless terms are favourable for loss of profits.
Capped deals where there is any doubt the site might experience problems.
Capped deals are those where the deal is a % of sales deal but with an agreed base adjusted during the term of the lease by CPI; should the % of sales be less than the agreed base the landlord with refund the difference.
An option to vacate or negotiate new lease should nominated major retailers or a nominated number of vacancies occur within the centre during the term of the lease.
Be forensic on the details on your disclosure statement to cover ingress, egress Kiosk, casual leasing concerns as well as option to vacate or negotiate if major retailers ‘go dark’ or substantial vacancies occur.
All negotiations to be made understanding that there are moves to around the Four Pillars of National Harmonised Retail Tenancy Legislation through the States Retail Tenancy Group they are;
The ARA is working towards adopting some or all of these recommendations; some could be agreed during the term of the proposed lease.
Retailers’ should also be aware of the moves to embed ‘Creeping Acquisition’ and maybe ‘Obligation to Divest’ powers to the ACCC through the TPA.
The ‘Obligation to Divest’ could mean a rebalancing of the lease terms and conditions between the major retailers vs. speciality chains, medium and SME retailers during the term of your lease.
As already said, ‘Buying’, leasing retail space for summer – Christmas 2009, now is a good time.
Great deals are being done and there to be done.
The maxim look twice buy once applies.
We cannot stress enough however how important it is to be forensic when detailing concerns in your disclosure statement.
It is hoped that these pointers are found to be helpful and useful.
Good hunting……..
For help to find, source retail sites or negotiate Shopping Centre Leases email Shopping Centre Leases.
Tony Standley
Principal
The RETAiL Alert Group
(Australia)
Mobile +61 (0)41 924 0497
e-mail
info@adsass.com.au
Fax +61 (0)2 9987 0633
Website
http://www.retailalert.com.au