5 things to consider when signing a retail lease

Whether you are starting a new retail business or relocating an existing one, your location is paramount.

But this goes further than just finding a good building.

It also extends to making sure that the building is right for your business and that all relevant factors are covered in your lease.

Make sure the building is right for your business and all relevant factors are covered in your lease.

Gorman Commercial Managing Director Stephen Gorman says there are important factors all retail business owners should keep top of mind when signing a lease.

Read more: Top tips for dealing with landlords

The top 5 factors to consider

1. That there is a market for your business.
2. That the rent is fair market value.
3. That the business is relevant and will not be impacted dramatically by the Internet.
4. That there is an adequate lease term in case you choose to sell your business or assign your lease.
5. You have sought appropriate advice before signing the lease.

Gorman says tenants need to understand they are committing for, usually, three to five years.

“Clearly they need to have a business plan in order that justifies them entering into a lease at a particular rent and having advice that the business profits justify such a rental,” he says.

Read more: How much rent should I pay for my business space

“They need to understand the key elements of what they are committing to. This particularly relates to understanding their commitment to rental, building outgoings, rent reviews and of course any guarantees they are providing in case the business gets into trouble.”

Gorman says all businesses should obtain legal and accounting advice when committing to a lease.

All businesses should obtain legal and accounting advice when committing to a lease.

“Also the other important thing we believe tenants should consider is the relevance of their business in today’s world and whether they feel comfortable committing to a long-term lease and that the business they are in will be sustained throughout.

“What I am getting at here is making sure the Internet or other influences don’t make their business irrelevant.”