RPI vs CPI Rent Reviews- New Lease

[Jprandss]

Hi all,

I don't need to get into the detail here, but I am agreeing a new retail unit which is a considerable cost- over £7k a month. Leaving aside whether this is a good idea or not, the landlord is asking for RPI increases 3 yearly, but is happy with a collar and cap.

I have multiple other leases and I am not certain which is used on the other leases- most of our landlords are normal reasonable people and we negotiate market forces at review and inevitably agree an increase that feels about right.

This seems to be a 'bigger fish' landlord and wants to agree review %'s before we start, eg RPI minimum 3%, max 6%, three yearly.

Have others been in this position, should I just agree something as above and be done with it, or should I be employing a negotiator on my behalf?

It is a highly desirable unit in a highly desirable town and frankly I am lucky to be at advanced negotiations on it. Not a good stance for bargaining, but it is true.

 

[Mark T Jones]

Sorry, what's the question?

 

[Jprandss]

Sorry, what's the question?

Have others been in this position, should I just agree something as above and be done with it, or should I be employing a negotiator on my behalf?

Is there a massive difference between CPI and RPI or does it always lead to negotiation on current climate anyway?

 

[DontAsk]

Is there a massive difference between CPI and RPI

Looking at the historical CPI and RPI figures will answer that.

Whether you want to agree to something up front is your choice. In todays business environment I would say any positive collar is too high and you other landlords are mor reasonable. But then I don't lease anything.

 

[Mark T Jones]

Have others been in this position, should I just agree something as above and be done with it, or should I be employing a negotiator on my behalf?

Is there a massive difference between CPI and RPI or does it always lead to negotiation on current climate anyway?

This is one thing where Google/AI can give you a nice, neat comparison chart.

Whether they will negotiate depends on several factors, but if they have interest from a solid headliner, it's unlikely

 

[WaveJumper]

CPI is generally better, considered to be more of an accurate measure of inflation compared to RPI. When in the commercial game RPI had always been favoured by the landlord due I would think as historically it came in higher.

I believe from memory theres a move to make them roughly the same by 2030 but don't quote me on that.

I would say though if dealing with a "larger" landlord who perhaps has lots of properties ie a large retail space (thinking shopping centre) when rent reviews come around they will always point to the latest deals they have just done (normally) at a higher rate per square foot and use this as a justification for a more shell we say aggressive increase.

Although of course I accept these days depending on where you are they may have more empty units than you can shake a stick at, and will be only to pleased to get someone in.

 

[Jprandss]

Thanks all, I've spoken to the agent today and he offered 'collar and tie' between 2 and 5%.
I think this is fairly reasonable and likely whether RPI or CPI wont make much difference in that.

 

[Paul Kelly ICHYB]

The bottom line is do you want/how much do you want the unit?

 

[Chris Ashdown]

You could ask for a fixed price 5 year contract and see what they come up with