Those of us with long memories back to a time when we all knew what made up a week, a month or even a quarter can remember a time when the mere mention of a turnover rent lease would be scoffed at by most, if not all areas of real estate (be it owners, operators and the media) but now with the sun rising on the new world order the topic finds itself basking in the spotlight again - but this time with a much more positive spin.
It's certainly the case that over the years a significant lack of trust has built up between tenant and landlord around the one way rent review coupled with secrecy around footfall and store turnover and that secrecy extends between landlords to perhaps an even greater extent. That is going to require far more than a "band-aid" to get to the promised land where relevant data is considered to be jointly owned and shared for the greater good.
But if we are to take a new generation of retail and leisure occupier/owner relationships forwards in the new era then a sensible starting point is a genuine turnover rent arrangement which is equitable to both sides of the table. If not then i would wager that new entrant operators will be both flexible and tech savvy enough to find a way to market on their own or in collaboration with other operators rather than waiting for the industry to start evolving... time will certainly tell!
Turnover leases, long mistrusted by landlords and also some tenants, are being touted as a new way forward for retail and leisure, but they are more complicated, and will require a fundamental change in the way property in the UK is valued and funded. It is the kind of change the slow-moving real estate sector has resisted for decades. But with the coronavirus pandemic turning the industry on its head, that resistance is now futile. Change that was happening gradually has now accelerated to a sprint.
