Michael Coyne, (formerly Frontier Photographics, Darwin), argues that it’s a lessee’s market, and a great opportunity to get a better deal on your retail space:
For those retailers out there renting, this is for you. Go to your nearest real estate agent and find out what everyone one else is paying for retail leases in your area. In some states, retail leases above a certain figure are registered with the state planning department, and it’s easy to find out what others actually paying per square metre.
Do not discount the fact that some of your space might be used as lab area or office – you should consider this as office space and consider that rental value. Commercial rental leases are written to make money for the landlord, not you – but the landlord can only make money if someone is paying for the space. Look around you, and in neighbouring streets, you might be surprised. Tell the landlord to bugger off and find someone else; shake things up – don’t just roll over.
My mother took over a 70 square store in a shopping centre after my father died not long ago. The landlord was charging her some $12K a month, while inner-city CBD space of the same size was going for less then half the price. I (on her OK) went to the landlord and politely but firmly told them (not asked, but told) that the rent would be at market value for the CBD area, and had the rent reduced by half. You may be surprised how much landlords will drop their prices if you are firm.
It’s simple landlords need tenants to pay their bills. They have had the upper hand with smaller tenants for a long time, but the tide has turned. If are not happy with anything, get the bill reduced; don’t complain about things, just go in and tell them. The retail market is in such a hole right now, they would rather you stayed than try to find a new tenant.
Think of it this way. Market value is like a top brand camera’s RRP. Everyone knows it, but nobody pays it. Then you have the various price lists, each one made out with a different discount depending on who you are. We all chase the best price when it come to discounts, rebate, and what we give the customer.
So if you are a good tenant and have been paying you bills, then it is time for a discount.
– Michael Coyne
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