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:
To register your attendance for the online session click the link below:
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:
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).
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.
Tess Lunt | Member Relations – Team Leader