In two of my seats now, setting a tone can be very important for proceeding negotiations. In Business Rates, as soon as one unit on a high street (for example) has been allocated a certain percentage reduction, the other units along that street can follow suit, taking into account various variables. When dealing with rent reviews, a similar method is applied. When considering a revised rent at rent review, one researches into local market deals to portray the current levels at which similar space is letting on the open market. These levels can then be related to the subject premises with adjustments for variables. When considering a landlords property with multiple retail tenants on ground floor, all with similar rent review dates, it can all become particularly interesting. The rental level set for the first rent review will essentially set the tone for the other tenants. With the Landlord as our client, it is in our interest, as well as the clients, to ensure that we can secure the highest rent possible for the first rent review, securing increased income for the next five years, but also securing a tone in which the other retail units can follow. However, a settlement is not always reached and the process can lead to arbitration or an expert witness. In my experience in this team, a settlement prior to third party involvement, where both parties are pleased with the outcome, is the most efficient procedure.
Will Jarman, Lease Advisory