Opening a Retail Business in the UK: What you Need to Know | Page 4
Opening a Retail Business in the UK: What you Need to Know
Leasing the Property
There are two main options to consider when hunting for a new retail property. The first is to
purchase the building yourself. However, in today’s uncertain economic situation, taking out that
much debt can be risky. (Purchasing property is normally the want of larger companies with a
substantial cash flow). For the majority of start-up businesses, leasing is the most sensible option.
Leasing
A commercial business lease is the term used for renting a property, much as you would do a
residential house or flat. However, commercial leases have several factors which set them apart
from residential agreements.
A commercial lease agreement should cover the following matters:
The immediate rental cost of the property, and how much it could increase to over the length
of the lease.
The total length of the lease.
Whether there are any get-out clauses. For instance, if the business hits hard times, is there
an option for you to give up the lease before the expiry date? (In some cases, it may be
possible to transfer the premises to somebody else).
Whether or not a guarantee is required. Many landlords will ask for verification that you can
afford the rental costs. Usually, a bank guarantee is enough, but in some cases landlords
might insist on taking a charge on your (or another directors) personal property.
How does the lease conclude? Is the automatic right to renew the lease in place, should you
want it? Having to change location could have a substantial impact on your business, so it’s
important to double check this. (We’ll cover this in more depth under ‘Concluding a lease’).
It’s also important to look out for any hidden costs. These can include:
Service charges. Service charges are sometimes put in place to cover things like cleaning,
heating and lighting. It’s vital to check what these are in advance, otherwise you might find
yourself paying far more in monthly costs than you planned.
Commercial Property – Industrial Units, Office Space to Rent
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