Retail leasing FAQ13: What is a market rent review and how does it work?

What is a market rent review and how does it work?

• A market rent review is another method of determining the rent to be paid for the next year of the lease
• Instead of applying a cpi or fixed percentage increase, a market rent review proposes a rent which may be more or less than the current rent and is based on the amount a landlord might reasonably expect to receive, and a tenant may reasonably expect to pay
• The process allows for negotiation between the parties and if no agreement can be reached, a determination is made by an independent valuer
• The lease will include detailed provisions relating to the process to be followed
• When determining what a tenant may pay, it should be ‘for substantially the same use’