A practical guide to commercial rent reviews in the UK
This is the cornerstone guide to the commercial rent review process. It explains the stages of a review and links to deeper guidance where a subject needs more detail.
Prefer to see the process visually?
Follow our interactive-style timeline from the review mechanism and review date through negotiation, agreement or third-party determination.
What is a commercial rent review?
A rent review is a mechanism within a commercial lease for reconsidering the rent at specified dates. The precise mechanism is contractual: the lease determines how the review operates. Read the introduction to commercial rent reviews.
1. Identify the review date and mechanism
Establish the contractual review date and whether the lease provides for open-market rent, RPI/CPI indexation, a fixed increase or another formula.
2. Read the rent review clause
The clause defines the valuation exercise, including assumptions, disregards and dispute procedure. Read our guide to rent review clauses.
3. Understand the property being valued
Floor area, configuration, frontage, access, specification, permitted use, repairing obligations and improvements can influence rental value.
4. Gather and analyse comparable evidence
Completed lettings, renewals and review settlements may be relevant, but each needs to be analysed. Learn how comparable evidence is assessed.
5. Establish market rent
The valuation method depends upon the property and market. See how commercial market rent is assessed.
6. Consider the property sector
Different markets use different analytical conventions. See our guides to retail and ITZA, office rent reviews and industrial rent reviews.
7. Make and assess proposals
The parties normally exchange proposals and supporting evidence. A reasoned position tied to the lease and evidence is more useful than negotiating only from a percentage change.
8. Negotiate
Many reviews settle by negotiation. Settlement should be clearly recorded and the retrospective financial consequences understood.
9. Consider third-party determination
If agreement cannot be reached, the lease may provide for independent expert determination or arbitration. Understand the difference.
10. Back rent and interest
A delayed settlement can create a balancing payment and sometimes interest. Read about back rent and interest.
Frequently asked questions
See our commercial rent review FAQs for concise answers to common questions.
Important
This guide provides general information only. It is not legal advice, a valuation or advice on any particular lease or property. Professional and legal advice should be obtained where appropriate.