There are several common mistakes made when dealing with your Lease and the Landlord/Centre Manager relationship. We describe the most common leasing mistakes retailers make and why they’re so important.
Mistake one: I don’t need to do any research.
Regardless of any negotiations you enter into, research is required to establish the outcomes you need to achieve. In retail, tenancy leasing research is needed on your industry, business, the shopping-centre, landlord and the current market.
Mistake two: Waiting – not leveraging time.
Every lease has two common elements, a commencement date, and more importantly an expiry date. Time can be your enemy or your friend.
Make a conscious decision to leverage your negotiations. In most cases this means starting the process early. Don’t be the one waiting for the Landlord to contact you, by then it’s too late.
Mistake three: Not knowing the numbers.
Make it your business to know how the real-estate you lease performs for your business, not how you perform for the real estate (landlord).
Know your occupancy cost percentage and sales per square-meter ratios, and how these compare to industry benchmarks.
Mistake four: Not knowing the costs.
Before you look at any new lease, renewal, or option, have a clear and concise knowledge of your fit-out/refurbishment costs. However long you need to amortize these comfortably and make these known within the negotiations, your lease needs to reflect achieving these Key Performance Indicators as well.
Mistake five: No meetings/file notes.
At each lease negotiation meeting, phone call, e-mail – make notes. Keep a file in date order that is easy to reference. After each meeting confirm your understanding of the points back to those you meet or call. Continue after the lease has been entered into, maintain this file and continue with your notes. You never know when you will need to rely on these to protect your position.
When it comes to negotiating with Retail Shop Leases, the ‘Lord’ is never going to be taken out out of Landlord, while they remain so highly leveraged with superior resources and ample data and analysis – derived from your sales and rental/lease information.
MiLease is a FREE online platform for ARA members, providing access to exclusive data, tools and education to best support them in getting the most out of their shop lease today and into the future. Using the platform, members will have access to:
- Lease expiry reminders;
- Lease event action checklists;
- CPI rent calculator;
- Webinars, forums and;
- MiLease retail health checks
For more information about MiLease visit www.lease1.com.au/registration
Lease1 is the leader in its specialist field and is committed to providing personal, timely and cost-effective services to save tenants time, money and stress in their lease negotiations. Visit www.lease1.com.au
