Turnover Rents – Flavour of the Month, or the New Normal?

The surge in popularity in turnover-based rents has come as a reaction to a period of great economic uncertainty. The High Street, already struggling before Brexit and the Covid-19 pandemic, has reacted by seeking increasingly flexible lease terms.

Turnover rents are attractive for tenants, with the landlord sharing their business risk to some extent. They offer flexibility when business turns down, while incentivising the landlord to promote and maintain the development. For the landlord they reduce the risk of tenant insolvency and rental voids.

But working through the implications in the lease drafting can be a headache, raising issues on information capture, underletting restrictions and the operation of break clauses, to name a few.

This webinar considers these issues, as well as the problem of how well turnover rents work in a world of increasing sophistication in online retail models.

Have a question? If you have any comments or feedback on this content, please get in touch.

Learning objectives:

• Calculation of turnover rent

• Ability to revert to an open market rent

• Implications for alienation

• Impact on rent review

• Impact on break options

• Relevance of use restrictions