Being a confident negotiator is mostly about having all the facts, which you should have if you’ve been following the first three Golden Rules.
But if you still don’t feel confident about negotiating the lease, I would recommend working with an experienced professional leasing representative.
It’s also useful to have some options (perhaps that should be Golden Rule #6); that is, alternative sites you can fall back on. You can’t negotiate unless you can say no. Fall in love with a given site and your chances to negotiate the lease decline dramatically.
But let’s say you’re facing significant rental increases in a site you already occupy. Here are five steps you should take to ensure the lease you sign is to your advantage:
- Work promptly and diligently to secure current and accurate information on your adjacent tenants’ recent lease renewal agreements with the centre, so you have a clear picture of the existing rentals around you.
- Negotiate the scope and scale of the tenancy refit works requested by the centre owner.
- Renegotiate, where possible, the renewal process until you are absolutely confident you can sustain the new rental going forward and can afford the tenancy refit works.
- Schedule tenancy refit works during the quietest trade period of the year to ensure minimal impact on your business.
- Identify and potentially negotiate the annual review mechanism within the renewal.
Happy ‘fit’ retailing!
Here’s a look back at Golden Rules #1, #2 and #3 of reducing your occupancy costs:
- Golden Rule #1: Research, research, research
- Golden Rule #2: Know your lease
- Golden Rule #3: Mind your own business
First published in Inside Retail on 17 December 2019.