As leases have shortened over the last number of years, the established periodic events such as rent reviews have become less important in the contractual relationship of landlord and tenant.
The ability to identify events that will impact upon that relationship enables either landlord or tenant to maximise the potential value in any situation that may arise. That event may not be at lease expiry or at a specific break date but may be a negotiation which arises in a particular market as the strength of either side’s negotiating position changes.
The ability to identify that opportunity and to secure the required result is the art in this process. At Dixon Wright, we have worked for both landlords increasing their return from an investment and for tenants, securing reduced ongoing liabilities. We can spot where opportunities arise and have been very successful in securing, through re-gearing, the following:
- Significant rent free periods in exchange for removing breaks.
- Reduced rentals in exchange for longer lease.
- A removal of Terminal Dilapidations liability in exchange for a new 5 year lease.
- An increase in rental in exchange for allowing subletting of part to a third party.
- Removal of a break clause in exchange for varying a user clause.
Securing the result is only half of the battle, identifying the opportunity can require as much care and thought.