Not every store is worth keeping. When a site is underperforming or no longer fits the network, Elite Retail Leasing negotiates the exit — minimising surrender costs, make good liability and disruption to your remaining portfolio.
Walking away from a retail lease is expensive if it is handled badly. Break the lease and you may be liable for rent for the balance of the term plus make good. Simply hand back the keys and you risk a claim you have no control over.
A negotiated surrender is usually the better path. The landlord releases you from the lease, you agree what is payable, and both sides move on with certainty. What that costs depends almost entirely on how the negotiation is run — and on how much the landlord wants the tenancy back.
We assess your position first: remaining term, current market rent versus your passing rent, demand for the tenancy, your make good exposure and the landlord’s own leasing pressures. That determines whether you are in a strong or weak position, and how the approach should be framed.
We quantify your realistic worst case — remaining rent, outgoings and make good — so any surrender figure can be measured against a real number rather than a fear.
Where a surrender payment is required, we negotiate the amount, the timing and what it releases you from. A surrender that leaves make good unresolved is not a clean exit.
Make good is frequently the largest single item. We negotiate scope, cash settlement in lieu of works, or a release where the landlord intends to refit the tenancy anyway.
Sometimes the better outcome is not a surrender at all. If the site has value to another operator, assigning the lease can remove your liability without a surrender payment. We assess both routes before recommending one.
If you hold other sites with the same landlord or centre owner, how you exit one tenancy affects every future negotiation. We manage surrenders with that in mind.
A lease is a binding contract, and breaking it without agreement generally leaves you exposed to the remaining rent and make good obligations. A negotiated surrender converts an open-ended liability into an agreed, final figure. Your solicitor should advise on the legal position; we negotiate the commercial outcome.
It varies widely. Where the tenancy is in demand and the landlord can re-let quickly at a higher rent, the cost can be minimal. Where there is a long remaining term in a soft market, it can be substantial. The assessment we do first is designed to tell you which situation you are actually in.
Typically several weeks to a few months, depending on the landlord, the remaining term and whether make good is contested. Starting early gives you more room; approaching a landlord when you have already closed the store does not.
Tell us about your site, your lease or your growth plans. We will tell you where you stand — directly, and without obligation.
© Elite Retail Leasing — Retail Leasing Consultants, Melbourne, Victoria, Australia