Lease Negotiation and Information Webinar

ARA Australia Post Members - which is Every LPO

ARA will be holding an Australia Post Lease Negotiation and Information Webinar:

Monday 26th February
2pm (Melb,Syd,Can) time

To register your attendance for the online session click the link below:
https://attendee.gotowebinar.com/register/5380676043046077443 

REGISTER YOUR EXPIRY DATE

To register your expiry date with ARA for timely, beneficial reminders in line with your lease negotiation period click the following link and follow the prompts:

http://ara-registeryourleaseexpiry.pages.ontraport.net/





TOP 10 Leasing Negotiation Tips 



1. Research is Mandatory

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, your business, the shopping centre, the Landlord and the current market.

 

2. Leverage Time

Every lease has two common elements: 

  • a commencement date
  • an expiry date



Start the process early – do not wait for the Landlord to contact you, at that point it is too late.

 

3. Benchmark Real Estate Performance

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 theses compare to industry benchmarks.

 

4. Know your Lessor and Shopping Centre

Before any negotiation, know who you are dealing with, their structure, and their capacity to make decisions, the process/reporting they need to make to have a deal approved. Just like having your own product knowledge, details about the Lessor’s product- i.e. the shopping centre is vital. Know what the major turnovers are, the overall sales of the centre, as well as the number of customers. Find out how these compare to other similar shopping centres, because the Landlord is comparing your business against a wide range of others.



5. Know your capital costs

Before you look at any new lease, renewal, or option, have a clear and concise knowledge of your fit-out/ refurbishment costs. How long you need to amortise these comfortably and make these known within the negotiations. Your lease needs to reflect achieving these Key Performance Indicators as well.



6. Lease term to exceed amortisation

Following on from tip number 5, the lease term should always exceed the amortisation of capital period. For example, if your capital is a facility over 5 years, then your lease needs to be over 6-7 years.

 

7. Make and File Notes from meetings

Make notes at each negotiation meeting, phone call, e-mail, etc. 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, to maintain this file and continue with your notes- you never know when you will need to rely on these to protect your position.



8. Create Relationships

Establish positive and regular communication and professional relationships with your Landlords, Agents, Centre Managers, even Cleaners, as it will be much easier to raise a problem from within a positive relationship. Remember that Landlords keep file notes also. 



9. Review and check

Take a tip, make notes, confirm details in writing (email), and always check and review all parts of Disclosure Statements (an empty representations section should be a Red Flag).



10.Get Advice

Don’t go into a lease negotiation without getting advice from the professional people who know. Source advice from Industry Associations, Retailer Groups, Other Retailers, Franchisors, Industry Experts as well as Retailer Advocates.

Don’t be afraid to ask even what may seem like the simplest of questions, if you get it wrong it can cost you for a long time.

 



 

ARA-logo---RGB-Trans

Tess Lunt | Member Relations – Team Leader
Australian Retailers Association
Melbourne office: Level 1, 112 Wellington Parade | East Melbourne | Victoria | 3002
P: (03) 8660 3301 F: (03) 8660 3399
tess.lunt@retail.org.auwww.retail.org.au | 1300 368 041

Comments

Sandgroper's picture

As a leasor to Telstra, would be great to have one the other way. We gave 28 days notice to move out to their agents JLL and now have them jumping through hoops to stay. Long story but at least they have now paid their 7 months of overdue outgoings. As I keep saying to Mrs SG, they have no sympathy for the little LPO's in shopping centres they try to bully around.

maggiesimpson's picture

Sandgroper, it took us 2 years and a barrister to get Telstra to pay us an increase in their rent. They finally did though. We stuck to our guns as there is no way they could move the exchange. We have since sold the building to an investor so now we pay rent.

Sandgroper's picture

Magie, their lease expired 3 or more years ago and we never renewed as they needed to do some repairs that they hadn't. We gave JLL 28 days notice and now ceiling fixed, fence fixed, paving near their cable pits fixed, smoke alarms being tested regularly again, emergency lighting fixed etc. We have also modified (reduced) their lease area on the new proposition and are close to signing up an new lease with new conditions. Mrs SG is almost over dealing with tenants/ property managers both residential and commercial.