Top tips for successful, and timely, rent negotiations for your commercial property investment.
As an owner of a commercial property investment, rental returns are one of your most consistent and reliable income streams, which is why it’s imperative that you receive market rent for your property. And, as commercial leases can run upwards of 10 to 20 years, it’s also vital to your business for it to remain a commercially viable investment.
Rent review clauses are typically built into commercial property leases, but each lease has different stipulations for things such as percentage increase and allowable intervals of increase. However, having these clauses written into the lease does not always guarantee that the process is easy, which is where the experienced commercial property agents at The Prideview Group can help.
Why a rent review is important
Quite simply, if you secure an increase in your rent, it will increase the overall value of the property. That’s why, in a rent review situation it’s more important to get the increase than to actually get your rent – because in the long term this will be better for your property. Knowing this, you may be able to negotiate something with your tenant whereby you offer a few months rent free in exchange for a long term rental increase.
Assessing your situation
If you have a rent review negotiation scheduled for your property, your first port of call should be to talk to one of our experienced staff members here at The Prideview Group. We will assess your individual situation to decipher what we think the upside of an increase is and also advise on how it should be carried out. In some cases there may be the potential to have a one on one conversation, which is favourable as there will be minimal fees involved. In other cases, it will be more beneficial in the long run (both in time and money) to employ a surveyor.
How a surveyor can help
Whilst a surveyor may not always be vital to your rent review negotiations, they could be particularly helpful if your property is let to a blue chip client. This is because the bigger the blue chip client, the less likely it’ll be that you’ll be able to have a one on one chat with the decision maker, so hiring a specialised surveyor can be the key to your rent review success. Most surveyors will charge a fixed fee and may also charge an incentive based on the increase they negotiate.
Surveyors know all the legalities when it comes to commercial leases and will have a long history in dealing with major blue chip companies. By knowing the process intimately, decisions can be made faster and an agreement can be made in a more timely manner. They will also be able to look over your lease and assess if you have grounds for a major increase, and if there are any restrictions involved. Surveyors will also be able to act on your behalf if any disputes arise in relation to the increase and will be able to fight it out on your behalf.
Finding the right surveyor
The most important point when it comes to employing a surveyor, is to ensure that you employ the services of someone who specialises in negotiating rent reviews for the type of property you own, as this will see your greatest chance of success. Each surveyor will have a different niche in which they operate – some specialise in leisure or retail; some in high street or drive through restaurants and you’ll need to make sure you get the right one. Having worked as commercial property agents in London & the UK for the past 30 years, we are able to connect you with the right people and put forward our recommendations for who would best fit your situation. If you are looking to negotiate a rent review for your commercial property investment, we are here to help. Our experienced staff will be able to assess your situation, advise on what action to take, and connect you with the most appropriate, and qualified surveyors in the business. Get in touch with one of our friendly team members today on +44 (0)208 954 0878 or via email here.