---
title: "Retail leasing FAQ7: What percentage of my gross turnover should occupancy costs be?"
description: What percentage of my gross turnover should occupancy costs be?
---

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3. [Occupancy cost](https://resources.lpc.com.au/knowledge/retail-leasing-faq?hsLang=en#occupancy-cost)

# Retail leasing FAQ7: What percentage of my gross turnover should occupancy costs be?

## What percentage of my gross turnover should occupancy costs be?

- Benchmarks vary among different categories of retail and different levels of turnover (size of business)
- May be as low as 6-8% or up to 10-12% but sadly, many retail businesses operate at above 20% which indicates either their turnover is too low or their rent is simply too high. Either way, these businesses are operating in a state of ‘financial distress’
- Aim for no more than 10-12% of forecast turnover when agreeing to a new lease
- If in a lease and OCR is \>18%, you need to make drastic changes including seeking realignment of rent to turnover

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