The 5 Golden Rules of reducing your occupancy costs: Rule #4
For the past few weeks, contributor Brian Walker has been sharing his Golden Rules of reducing your occupancy costs in a shopping centre.
The first three were all about research, including every question you should ask the property manager when considering a store location, all the key terms and conditions you need to know before you sign a lease agreement and how to diagnose your own business to ensure you’ll succeed in the centre.
Now, it’s time to get down to brass tacks. Here is everything you need to know to negotiate your lease with confidence.
Golden Rule #4: Negotiate confidently
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.
Come back in the coming days for the final Golden Rule.
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