Market Review – Determination
Existing Gross Rent: $165,000 p/a
Proposed Gross Rent: $215,000 p/a
Determined Outcome: $115,000 p/a
Total 5-Year Benefit to Tenant: $500,000+
With an existing gross rent of $165,000 per annum, this franchisee was already struggling. When he was looking at taking up his lease option (9 yrs + 5), the landlord proposed an increase to $215,000, with no justification.
Furthermore, the centre was poorly managed overall and had a dysfunctional tenancy mix that was negatively impacting its tenants.
The graphs and reports from a GEM™ lease analysis were used as the franchisee’s submission for a rental Determination by an experienced Valuer.
Based on the GEM™ reports, the Valuer determined the rent at around $115,000 gross per annum. Over 5 years, the benefit to the franchisee was over $500,000 – and he was able to continue trading so that he could amortise his business investment.
