More commercial retail property discounts on the horizon?
Property investors looking for commercial retail property may be interested to hear that store ...
Property investors looking for commercial retail property may be interested to hear that store leases are being secured around the nation at a 40 per cent discount.
According to SmartCompany, some retailers have been successful in obtaining rental agreements for an amount significantly lower than the asking price.
The latest Sitting Tenant Renewal Report, prepared by Leasing Information Services (LIS) showed that retail giants Coles, David Jones, Myer and Woolworths have all been successful at negotiating rents, as well as smaller stores.
Shoe store Hype DC received a 40 per cent discount on its Westfield Bondi Junction lease when it came up for renewal in September last year - reducing the annual rent bill from $340,000 to $200,000.
The company's director, Peter Pitt, said the previous lease amount was "way above market rent".
"It's one of the few mistakes we've made in leasing over the years," Mr Pitt told the Property Observer.
However, he said Westfield was agreeable to reduce the rent when the retailer announced it would relocate from the complex otherwise.
"They understood that the market is the market," Mr Pitt added.