Retail Premises

[maria102]

Does anyone know where I can find "hints and tip" or such like for leasing retail premises? We are hoping to look at somewhere this week and I don't have a clue what we should be looking for, what I should be asking etc. The rent seems to be around half of the others on the row, which suggests there may be something going on (its previous life was an off license, we are looking to open a ladies clothing boutique)

 

[Tungstone]

Does anyone know where I can find "hints and tip" or such like for leasing retail premises? We are hoping to look at somewhere this week and I don't have a clue what we should be looking for, what I should be asking etc. The rent seems to be around half of the others on the row, which suggests there may be something going on (its previous life was an off license, we are looking to open a ladies clothing boutique)

Get a copy of the lease and get a property lawyer to study each clause

 

[Antonia @limeone.com]

Even before you start spending money on lawyers you need to speak with other residents on the row and ask them what they know about the unit you are keen on. It may be that there needs to be a change of use or there is a lot of work needing to be done. You also need to do a lot of research on whether the number of people who pass by the shop are your target customers as retail clothing is in a slump currently on the High Street.

Find out from the agents what sort of lease, terms etc the landlord is seeking. If there is a requirement for a long term with an all repairing lease you are going to need to consider spending a lot on premises in the early stage of your business which is often outside the reach of most start ups.

Quiz the agent as to why there is such a low rent, how long the property has been on the market and what help is the landlord likely to give you in conversion to your required use. Even if you don't get straight answers the reaction to the questions often tells you all you need to know!

Look around a lot of sites and make notes and take digital photos of your preferred choices, this is not like a house buy, it is part of your new business and so take your time in looking at the flaws not just the positives.

 

[beadell]

If you decide to go for it and it does need a change of use make sure you speak to the council early on. Some seem to take for ages to respond to queries etc.

Also if you need to do any work make sure you ask the landlord for a rent free period, we managed to get 3 months rent free to turn a existing William hills shop into what is now Midhurst Pets.

Only other thing I can think off is try to negotiate the lease with a short break clause or what ever they call it :| (sure somebody else will know the proper name) with an option to renew, you dont really want to be tying yourself in to a 10year lease or similar!!

 

[maria102]

Thanks Guys - the lease terms state the following:

"The premises are held of effectively full repairing and insuring lease expiring 23rd March 2011, subject to an outstanding rent review dated 24th March 2006"

I wondered if this may be relative to the low price.

 

[retailworld]

Maria,

Where is it you're looking at specifically if in Manchester?

 

[Flexas1]

Investing a bit of money up front for an experienced commercial property agent to advise you will be well worth it (make sure they are a retail specialist) as I am not.

It sounds like you are being offered an assignment of an existing lease which means you will be responsible for the back rent since review (assuming the rent will rise) so effectively the current rent payable was set and agreed 7 years ago. You need to get a proper assessment of the rent liability you are assuming asap. Also be very careful with dilapidations liabilities as you only have 3 years until the lease expires and this could be expensive.

Hope this helps.

 

[maria102]

It sounds like you are being offered an assignment of an existing lease which means you will be responsible for the back rent since review (assuming the rent will rise) so effectively the current rent payable was set and agreed 7 years ago. quote]

Thats interesting, as the rent is significantly lower than the others! ie, half!

 

[Flexas1]

Yes this is not surprising. You need to get to the bottom of why the rent review is still outstanding. Doesn't sound like this will be a quick negotiation if you want to protect your interests properly.

 

[Jenni384]

"The premises are held of effectively full repairing and insuring lease expiring 23rd March 2011, subject to an outstanding rent review dated 24th March 2006"

I wondered if this may be relative to the low price.

AFAIK you don't really want a full repairing lease - I think this means you'd be responsible for structural building works as well as the usual decor, wear&tear etc.
If you end up with a full repairing lease you'll want a full building survey (i.e you don't want to take it on if it needs £50k of roof rebuilding doing, for example!).

I like the suggestion to ask around other shop tenants in the street to see if any information is revealed that way.

And why is the rent review so outstanding? Surely they would review it before signing up a new lease?!

 

[maria102]

AFAIK you don't really want a full repairing lease - I think this means you'd be responsible for structural building works as well as the usual decor, wear&tear etc.
If you end up with a full repairing lease you'll want a full building survey (i.e you don't want to take it on if it needs £50k of roof rebuilding doing, for example!).

I like the suggestion to ask around other shop tenants in the street to see if any information is revealed that way.

And why is the rent review so outstanding? Surely they would review it before signing up a new lease?!

The update is that the rent increase is nil according to the agents..though it will be a full repairing lease apparently. We have a viewing on Tuesday.