Several newsagents have contacted me over the last couple of weeks concerned about rent increases, which have ranged from 5% to 15%.
While no one wants a rent increase, every lease I have seen documents the basis for any increase.
A couple of the situations outlined to me recently are outside what the lease allows, but the retailer needs to be prepared to take action to defend their rights, which they appear unwilling to do – they wanted someone else to do that for them.
The bigger challenge right now relates to market reviews. In plenty of locations, the market has moved from when current leases were negotiated, giving the landlord an opportunity, that plenty appear to be embracing.
The rights of a retail tenant vary state by state. It’s not difficult to determine what your rights are and the avenues for appeal and resolution.
My advice to newsagents and other retailers is to make yourself aware of your rights in your state or territory so that you can act on them, rather than relying on someone else to do it for you, maybe at a cost, or maybe with an interest other than your own. Sure, you can talk to your association, or hire a negotiator. I still think the tenant is in the best position to achieve something closer to what they want.
The best position to be in when rent is being negotiated is to be the tenant the landlord likes, trusts and wants. If you are not that, finding someone else may be more appealing to them. So, if you like your tenancy situation, pay on time, keep conflict to a minimum and help the landlord feel proud of their investment.
Through 2023 and 2024 I think we will see continued upward pressure on occupancy costs. In our day to day business decisions we need to mitigate against the impact of higher costs, so we have a buffer of protection.