Retail Premises

Kinetic^

I'm in the process of getting a retail premises for my IT support business, good mix of residential and business clients. Due to where I'm looking at there would be a good bit of passing trade.

Is there anything specific I need to be on the lookout for in terms of lease agreements? What about the physical property? While I've gone through the purchase transaction of my own home, leases and commercial property is something new to me.

antoinolachtnai

There is a lot to this and you will really need a solicitor and possibly an agent too. You need to talk to these people as soon as possible.

amen

ensure there is break clause.

DubTony

amen wrote: »

ensure there is break clause.

Absolutely. And don't give personal guarantees. EVER !!!!

macl

Kinetic^ wrote: »

I'm in the process of getting a retail premises for my IT support business, good mix of residential and business clients. Due to where I'm looking at there would be a good bit of passing trade.

Is there anything specific I need to be on the lookout for in terms of lease agreements? What about the physical property? While I've gone through the purchase transaction of my own home, leases and commercial property is something new to me.

- Management fees (if applicable)

- Passing trade indicates you are going to be paying more rates -> Get rates figure

- Check lease to see if the rent is VAT-able. If yes, make sure you get monthly statements and include in your VAT returns.

- Make sure there is provision for rent reduction in the lease and not upwards only reviews. I signed a lease recently and fixed my rental costs for 3 years. Something similar might suit your business.

In general I would advise you ask for 2-3 months rent free to get yourself bedded in. If there's any bit of fit out to do to work it around your needs, landlords will usually grant that for you. After that...negotiate negotiate and negotiate some more. Landlords are open to this (more than ever)

Best of luck with the move into a commercial premises!!

TheInquisitor

Make sure that there are no upward only rent increase clauses. Those days are well and truly finished!

kilburn

I am looking at getting a project off the ground myself but the 3 buildings on my short list would need massive fit out work what is the general rule with landlords here, in an ideal world i do not want to put 100k into a building to make more valuable for a landlord, who could turf me out down the road.

antoinolachtnai

On the other hand, why would the landlord want to put 100k into the building, if your business might fold and if the rent might fall?

The general rule is that landlords want to rent buildings for a long time. Equally, tenants want long leases so they have certainty. This is not as important for tenants for office buildings as it is for retail businesses and businesses which require installation of special plant.

If you look for a lot of break clauses, etc. then you are facilitating the landlord to kick you out later, after you have developed the location.

kilburn

Six storey buildings that only ground and first floors are usable rest has fallen into dereliction so no brainer for landlord to sort out their building for a long term tenant

antoinolachtnai

If this is retail, upper storeys are really only storage unless there are escalators and lifts, so they often aren't worth investing in.But if they are convinced you are long term they will do it and factor renovation into the rent.