ADB | RENT REVIEWS |
free period over a specified period
of rent free periods with differently. Most
to be leases
now specify review is to
that the new rent at be that rent which will
be payable after the fitting-out period. If
expiry of the the rent free
on any lettings
goes beyond the
period, then the
headline rent can
Some leases are drafted in a manner in an attempt to ensure the review is undertaken directly against headline figures whereby such additional incentives are not discounted from the headline rent on comparables. However, often such clauses are ineffective in achieving their aims following a number of court cases on this issue.
The vast majority of current leases
intervals (although occasionally 3- yearly). There is no restriction on
implemented, but these are
The government has published a voluntary code of leasing practice for commercial properties in England and Wales in an attempt to encourage landlords to provide more flexibility in their leases to
downwards this is
a: 24 Old Burlington Street, Mayfair, London, W1S 3AW
the rental does not fall below the level granted at the date of the original lease. This is rarely adopted by the landlords, however
and the majority remain upwards only basis.
however, as a
An upwards and downwards review
incorporating such provisions is inherently more valuable to a tenant and, as such, may attract a premium rental anywhere between 5-15% above prevailing market evidence for comparable upward only review structures.
key terms that affect the rent review
Break Clauses One of the most valuable characteristics to assume for a lease at review are regular tenant break options.
Break options and drafting of such clauses is a complex area and a
detailed analysis many pages.
In simple terms, a regular and effectively operable break clause will enhance rental value providing it is to be included within the virtual lease being reviewed. It is important to thoroughly understand the clauses to establish
The structure of the break clause and any conditions attached are also important and need to be considered carefully.
of leases allow tenants to assign
t: 020 7494 0377