Retail Rent Reviews Explained: Ensuring You Pay a Fair Market Rent

For retail tenants and landlords, rent reviews are a key part of managing a commercial lease. Whether you run a hair salon, barber shop, nail bar, clothing boutique, café, hot food takeaway, fish and chip shop, Chinese takeaway, bakery, florist, newsagent, or convenience store, understanding the rent review process ensures that you’re paying (or charging) a fair market rate. A properly negotiated rent review can make the difference between a sustainable business and unaffordable costs.

What is a Retail Rent Review?

A rent review is a scheduled reassessment of the rent payable on a commercial lease, typically every 3-5 years. The new rent is determined based on current market conditions and is designed to reflect fair rental value for the premises.

Rent reviews are particularly important in the retail sector because high street trends change—some locations may see increased footfall, while others may decline in desirability, affecting rental values.

How is Retail Rent Assessed?

When conducting a rent review, surveyors consider several key factors:

• Comparable rental evidence from similar shops, cafés, and takeaways in the area.
• Location and footfall, including how busy the high street or retail parade is.
• Condition and size of the premises, including any improvements made by the tenant.
• Economic climate and market demand—for example, town centre footfall post-pandemic.
• Lease terms and any restrictions, such as permitted trading hours or use class.

Case Study: Nottingham Retail Unit Rent Review

A boutique clothing shop in Nottingham city centre was facing a proposed rent increase from £35,000 to £45,000 per annum. The landlord justified this increase based on market demand, but a detailed rent review conducted by Bramble & Wagg found that nearby similar-sized units, including a shoe shop and a jeweller, were paying significantly less. After negotiating with the landlord, we successfully agreed on a revised rent of £38,000, saving the tenant £7,000 per year.

Case Study: Fish and Chip Shop with Open Market Rent Clause

A fish and chip shop in Leicester was due for a rent review. The lease contained an open market rent clause, meaning the rent had to be assessed based on what the premises would be worth if let on the open market, rather than the tenant’s specific use as a takeaway. The landlord argued that the rise of food delivery services had increased takeaway demand, justifying a 25% rent hike. However, our assessment revealed that while online orders had increased, in-person footfall had declined, meaning an excessive rent increase wasn’t justified.

Furthermore, the shop had been fully fitted out by the tenant, meaning that if the current business left, the unit could be re-let as any retail premises—not necessarily a takeaway. When assessing open market rent, only the base premises should be considered, not the tenant’s investment in the fit-out. Using this argument, we successfully negotiated a modest 5% rent rise instead of the 25% increase originally proposed.

How to Ensure a Fair Rent Review

Whether you’re a landlord or tenant, these steps can help ensure fair outcomes:

• Seek Professional Advice: An RICS-qualified Chartered Surveyor can assess whether the proposed rent is fair and provide a detailed report.
• Check Lease Terms: Some leases contain upward-only rent reviews, meaning rent cannot decrease even if market conditions change.
• Negotiate: If the proposed rent increase seems excessive, you can present market evidence to support your case.
• Prepare in Advance: Don’t wait until the rent review is due—understanding your lease terms and recent rental trends can strengthen your position.

Why Choose Bramble & Wagg for Your Rent Review?

At Bramble & Wagg, we specialise in retail rent reviews across Nottingham, Derby, Leicester, and the wider East Midlands. We provide independent, evidence-based advice to ensure fair rental agreements for both tenants and landlords. Whether you operate a barbershop, bakery, café, or takeaway, our expertise ensures you’re not overpaying or undervaluing your premises.

Conclusion

Rent reviews are a crucial process in the retail sector, and understanding how they work can save thousands of pounds. If your shop, café, or takeaway lease is due for a rent review, consult a RICS surveyor at Bramble & Wagg to ensure a professional market assessment and a fair outcome.