Retail Franchise Shop in major A-REIT

Lease conditions / Lease terms:

End of 6.0 year lease “stitched up” just before major shopping centre extension;

Gross rent offered:

Increased from circa $160,000 pa to $210,000 by lease end (circa 30.0% of turnover);
Ran software modelling: used industry benchmarks; similar premises supported gross rents of $90,000 to $105,000 or thereabouts;

Outcome:

Still awaiting outcome

Comments:

Inflated rents may significantly inflate the value of any property. Prior to acquiring a property, test the veracity of the leases and rent levels.