Rent review - Retail premises

[millerland]

I have a property where the lease is due for renewal. Currently the rent review period is set at 'every 3 years' and I want to know if this period is standard for a commercial/retail lease. A lot can happen in 3 years (in the property market) and as the lease may run for up to 20 years I am concerned about commiting myself to a long term restriction in this area.

[Poppy]

There is no standard rent review frequency for commercial lettings.

Do you currently have tenants? What exactly is the problem?

[yeahbutno]

There is no standard, but 3 year rent reviews are certainly very very common.

If it's part of an existing and ongoing lease, I think it's highly unlikely that you'd be able to persuade the tenant to alter the frequency of the reviews.

To be honest, given the cost of organising a surveyor to professionally value the premises, and the time involved, I wouldn't really WANT reviews any more than 2 or 3 years in any case.

[millerland]

Thanks for that... I think I've decided to go for a professional property and therefore rental value review.

The way I see it is that in 3 years property value can increase... who knows?... maybe as much as 25 - 30 % so during this period the fixed rent will severely lag behund and in 3 years it would be difficult to negotiate a 30%+ reny increase to set it up for the next 3 years.

Anyway hopefully the agent I've engaged will help.

[yeahbutno]

Think you're doing the right thing.

I would disagree though, about the difficulty in negotiating terms. If rental values DO increase by 30% over 3 years, then you simply need to give your tenant evidence of this - usually an experienced surveyor will have access to both anecdotal and specific examples of nearby properties and their rental values.