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‘Turning over a new lease?’ Are turnover-based leases the answer for tenants facing COVID-19-related business disruption?

It’s not surprising that some landlords are concluding that sharing the pain with their tenants is a better option if it helps tenants to continue to trade. One way of achieving this is through turnover-based rents and in this briefing, we have explored some practical and contractual considerations for investors, landlords and lenders on this model. It’s a topical subject and just this week we have seen New Look launch a CVA seeking to reset 402 stores to a turnover rents , with its remaining 68 stores moving to nil rent, putting it on course for a showdown with its landlords.

Turnover-based rent is calculated as a percentage of the tenant’s turnover generated from the premises and benefits tenants by reducing rents when trading levels are low, whilst potentially giving landlords greater income than they might otherwise receive when trading levels are high.


private equity real estate, restructuring, private equity, covid-19