With the current wave of retail closures and occupier requests for rent concessions, the retail landlord and tenant relationship is under more strain than ever before. A growing sentiment amongst retailers is to move away from traditional leases with upward-only rent reviews towards more flexible leases with rents linked to turnover. However, a turnover based model, creates a number of significant challenges for landlords from the operational, financial and valuation point of view:

• How do you measure profitability of stores in the multi-channel word and how will that data be made transparent to landlords?
• How do you value turnover-based rents?
• Should financial debt arrangements be also modified to share risk and reward on equitable terms?

Retail landlords and tenants – friends or foes? is our take on the market conditions. Download the article.