Does web shopping affect rent?

Vacancy and excessive rent

Increasingly, vacant properties in shopping centers and shopping streets are becoming more common. After a tenant leaves, a new tenant comes along. That new tenant is usually soon gone again. Are rents still sustainable for retailers now that shopping is increasingly done via the Web? Or should we look at other methods of calculating rent than the usual ones? Think of rent linked to the number of passers-by or a rent linked to the turnover made via the Internet. Can you as a landlord perhaps prevent vacancy in this way?

Location

The "old-fashioned" methods by which the rents of retail spaces are calculated are based, among other things, on the location of a store, comparing it with similar cases. Once every - on average - five years a review request can be made to adjust the rent. This is subject to specific legal provisions from which, in principle, it is not possible to deviate. This current methodology often leads to high rents for which it is questionable whether retailers can afford them. This justifies the question of whether the current method of determining the rent can still be maintained. Is the location still so important? There are therefore calls for rents to be based much more on, for example, footfall or actual turnover, including turnover on the Internet for a particular business.

Rent linked to pass-through or turnover rent?

Nowadays, purchases are often delayed. Customers enter a store only for orientation or for the experience offered on site. The actual order is then placed via the Internet, after which an item is delivered to the home or can be picked up. If the rent is linked to the number of passers-by, it must be well established how to measure the number of passers-by. You should be able to monitor how many passers-by pass by each day. Then you should be able to find out which of those passers-by actually make a purchase at the store in question. All sorts of privacy issues play an important role here. Linking the rent to the actual turnover of a shopkeeper is probably much more practical. In addition to a basic rent, a rent can then be agreed on depending on the turnover realized by the retailer in question. Agreements will then have to be made regarding any turnover achieved via the Internet. This is because part of that turnover is often related to the passers-by who have visited the store and postponed their purchase.

Determining the rent: make clear agreements!

So where and how we store is relevant to how rents are handled. Perhaps in the future rents will more often be set differently. For a tenant, this may provide more air. It may also make it less likely that retail spaces will keep changing tenants. For a landlord, it may provide less rent. But better a tenant who can pay his rent than a tenant who pays nothing and leaves the landlord with vacancy. So when entering into a lease, think carefully about how the rent will be determined and set and get proper advice beforehand.