Rent Review Negotiations; What makes up a ‘best deal’?

rent review negotiations

All instructions taken on through our Lease Advisory team essentially require us to ensure the best deal is done for our clients. For the majority of clients, during rent review negotiations, the best deal for them is to either maximise the rent or obtain as low a rent as possible, depending on whether the client is a landlord or a tenant.

However, for some clients, achieving the best deal may not be dictated by the level of rent agreed, but by the overall terms which form the agreement.

Rent review negotiations

During lease renewal negotiations, a tenant client may be amenable to agreeing the landlord’s proposed level of rent if they can achieve more flexibility on restrictive terms through the lifting of, or widening of, restrictions previously set out in the original lease. Ensuring floor areas are correct and tenant improvements are formally documented and acknowledged can also be of benefit to a tenant client as this helps establish the basis of rents to be agreed at renewal and during future rent reviews.

On the other hand, a landlord client may be willing to agree a rent which moves away from levels supported by market evidence in order to maximise their investment through the covenant strength of the tenant. This could be done by agreeing a longer Term certain, with fewer or no break options being incorporated into a renewal.

Rent review negotiations can also see off-market rents being agreed through re-gearing of lease terms. This option may hold mutual longer-term benefits to the parties, with a landlord ensuring they retain the tenant during uncertain economic and financial periods and the tenant gaining some flexibility in the rent agreed and additional assurances which may otherwise not have been available to them.

Whatever approach a client wishes to take, and the result they ultimately want to strive to achieve, our Lease Advisory team are able to support and assist each step of the way through the provision of balanced advice.

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