I am often asked by newsagents for assistance with landlord negotiations. While I am not a lease negotiator, I have negotiated my own leases as well as revised leases to reflect changed market conditions.
I’m happy to share my thoughts with newsagents on why I have done and the goals I pursue so they can consider these in their own situation.
There are some awful leases signed by newsagents out there. Some are leases negotiated by so-called leasing experts. Some are poor leases newsagents paid others a fee to negotiate on their behalf.
The biggest challenge is educating landlords about the value a good newsagency brings to a centre that is often beyond the value of just rent being paid on time. This plus the traditional GP achieved by a newsagency need to be presented to the landlord in a way that they understand and can consider in terms of the total economic benefit to a centre.
A good newsagency is a service in the centre. A bit like a local council office or a government owned Australia Post outlet or the centre management office. Each of these is costed by the landlord on a different basis than traditional retail.
A good newsagency provides some low margin services that are vital to the overall appeal of a centre. On top of that we sell a range of products at margins that are not usual in retail.
A good newsagency also markets the business, and the centre, extensively outside the centre.
These are all factors that need to be presented to the landlord in a commercially appropriate way and with supporting material. Some landlords listen and respond with an improved rent offer.
Sometimes, newsagents do not get the rent offer they want because they have not made their case fully, professionally or both. Usually, these newsagents don’t want to be told this.
Negotiating a lease or revised lease terms is something to take seriously. You need accurate business data and a sound business case presented professionally and without emotion.
Just because you want a better rent deal is not reason enough for a landlord to give it to you.
I would add that the negotiation process of the next lease starts when you sign the current one.
Leasing Execs and Centre Managers are people too:
– Buy them a coffee now & then
– Keep them up to date with what you are doing
It is hard to screw someone you like & know…
Denis clad you have a good landlord. We have the landlord from hell. We have been negociating for over 12 months after advise from the managing agent to deal direct with the owner on this matter. Emails go unanswered questions about outgoings, how can they they go up 400% in 3 years when they do no repairs or maintance, copies of relivent receipts not supplied, invoicing for a repair which was covered by insurance. All the tenants are frustrated and now the owner has sent tenants a bill and wants tenants to pay him direct. Some have payed and now find out his company is not registered to collect GST. Some tenants now are talking legal action.
If only the landlord would communicate with his tenants and the managing agent, life would be so much easier for all. involved.
Greg , I must be dealing with your landlords brother . After chasing a new lease for the last 6 years and spending $6,000.00 I have just applied to The Dept, of Fair Trading for help .
Rod, we found the Dept of Fair Trading to be quiet helpful, but there are some issues to do with Capital Expediture where there are some grey areas.
Gregg, I’d suggest you develop a structured plan and communicate in writing based on factual business data. This can be useful if you take it further.
how can you buy them coffee when none of them last 3 months or a year for the job. anyone deal with AMP? i think they are the worst co. theydon’t know how to run shopping ctr
my centre run very badly by aMP, i now realize that westfield at least run by pro who knows to run a shopping malls , not like cowboy AMP who just want expensive rent and exorbit expenses with no value to tenants, what a joke!!!!
The most important step to negotiating with your landlord is to keep them informed of what you do for the centre – ads you run, mailings you do, tv campaigns you’re part of … anything you do to professionally represent your business and to drive traffic.