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  • #978232
    Zenteki
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    Hi all
    Just wondered if anyone out there had any dealings with Chadstone shopping center (Colonial First State) in regards to lease renewing. This is our first renewal with Chaddy so a little green when fighting large corporations.

    We are about to begin the renewing game of the lease but would like to negotiate with the base rent, rent annual adjustment and fitout requirements. I am wondering how flexible are these guys in dealing with independent retailers. We are not a franchise so don’t have a big supporting network.

    The major factors to consider at this stage is that Chadstone isn’t bringing the amount of foot traffic as it used to but still wants to charge a huge amount in rent. As i see it we are paying this huge rent on the basis that chaddy can bring in the people. They are hoping with the new developments it will increase the amount of people coming but that’s not until 2015 when it’s complete. So in the mean time it will be a huge construction zone which in my opinion will further decrease the foot traffic into the center. Is this a big enough justification to justify a decrease in rent?

    Also would like to speak to people who have dealt with them in the past with lease renewals. Anything that help would be appreciated.

    Zenteki

    #1105575
    PaulThomas
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    Hi Zenteki,

    In my experience with commercial leasing (as a tenant) it is best to negotiate a rent free period. Most landlords won’t drop their rent as this devalues the property.

    While the redevelopment work is underway you could negotiate, say a six months or longer, waiver in rent payments to compensate for lost business. I’m not familiar with your location, however, in some western Sydney suburbs such as Campbelltown the number of empty retail stores is high. Agents need tennants, so I could only guess in your case, the landlord will want a committed tennant, not an empty shop.

    Remember, the strongest person in any negotiation is the one who says the least. Put your best offer forward and keep very quiet. It’s easy to find empty retail space, so if your are not happy with the response move out! ;)

    Good luck and cheers,
    Paul

    #1105576
    bigbusiness
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    Hi

    As you are probably aware Chadstone have a very good Lease Administration department with their internal team of lease administrators, lease co-ordinators and internal solicitors which is actually ran from the Chadstone location itself.

    You will probably find in your existing lease that you have allowed the owner of the shopping centre to do whatever renovations they like to the shopping centre and you may have even approved the “temporary relocation clauses” for your business and items similar to that which helps the owner a lot come time for renovations.

    Yes the lease administration department would have some set guidelines on what they could possibly offer existing tennants that start to negotiate. The lease administration department may offer more enticing terms if you are a tennant that they wish to keep and that they don’t wish to lose. If you are a tennant that they no longer wish to keep they may be a bit tougher in their negotiations and believe it or not their are definetly some tennants that they don’t want in their centre! I think if you ask for a rent free period due to less pedestrian traffic they may come back to you and ask if you will be prepared to pay higher rent when the traffic flow increases (once renovations have completed) so be careful on this point. They will definetly not agree to lower rentals (someone has to pay for Frank’s new holiday mansion at Pt Leo) though as has already been mentioned in this thread lowering the rentals will devaluate the property and you will probably already know that Chadstone will only offer tennants a retail premises at fair market rental which you as a tennant may deem too expensive which is only natural.

    The best way to negotiate a rent free period is to put forward your commitment to Chadstone by agreeing to keep your shop fitout modern and renovate it as you both see fit, along with an agreed good set of lease terms I am sure that the landlord will agree to some form of bonus for you.

    regards,

    bigbusiness

    #1105577
    tenmat
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    Hi Zenteki,
    We are tenant reps that advise business on these matters. The in-house leasing team will have a set of benchmarks set by senior management that they will not be able to go below. The reason for this is that if they do it may have an effect on other negotiations in the center such as market rent reviews and lease renewals. That said negotiation is always a good idea and their first offer will have assumed you may want to negotiate. It is a bit hard to give advice in detail without far more information. You said it was a renewal so considerations for the negotiations are how long have you been in the center, how your relationship has been with management, is the current rent at market, exactly how will the redevelopment relate to your tenancy? Our website is http://www.tenancymatters.com and you will find us in the flying solo directory. If you want to have a chat in a little more detail you can call my mobile, I am happy to give you 20 minutes or so.
    Michael

    #1105578
    AxelJ
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    Hi Zenteki,

    Interested to know how you gone with your lease negotiation. We been offered a location in Chadstone but find that the rent asked is quite high and are wondering if Chadstone is really that great for retail at the moment. Is Colonial willing to negotiation with the base rent and annual increase?

    Your experience will be greatly appreciated.

    AxelJ

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