Turnover lease
Explore how we can help businesses with their commercial lease requirements.
Contact our teamA turnover lease, also known as percentage lease, is a unique type of commercial lease where a tenant’s rent is directly tied to the success of their business.
In this arrangement, tenants pay a base rent, along with an additional percentage of their business’s revenue, typically after reaching a specific sales threshold. This model is commonly used in retail spaces, such as shopping centres, where businesses expect their income to fluctuate depending on customer traffic.
At Moore Barlow, we specialise in helping both landlords and tenants understand the intricacies of percentage leases, ensuring that these agreements are clearly structured to reflect the financial goals of both parties. Whether you’re a tenant looking for a flexible rent model or a landlord aiming to share in the success of your tenant’s business, we provide tailored legal advice that helps protect your interests.
What is a turnover lease and how does it work?
A turnover lease offers a hybrid rent model, where tenants agree to pay a fixed base rent plus a percentage of their gross sales once a specific sales level, known as the “breakpoint,” is reached. The base rent provides a guaranteed income for the landlord, while the percentage of sales gives the landlord a share of the tenant’s success. For tenants, this arrangement can be beneficial as rent adjusts according to how well the business performs, which can help manage costs during slower sales periods.
For example, a retailer might pay a monthly base rent of £10,000, and once their sales exceed £100,000, they also pay 5% of any sales above that figure. This arrangement offers flexibility for both parties and incentivises landlords to maintain high-traffic, attractive retail environments that support their tenants’ growth.
Richard Hughes
Partner | Commercial Property, Real Estate, Real Estate Finance
How Moore Barlow can guide you through a turnover lease
At Moore Barlow, we ensure that turnover leases are drafted with precision to avoid any ambiguity and to clearly outline the responsibilities of both tenant and landlord. We work with tenants to ensure the breakpoint and percentage terms are reasonable and reflective of their business model. For landlords, we ensure the lease terms protect their interests, ensuring they benefit from the tenant’s success without causing unnecessary financial pressure during slower periods.
Our team reviews the structure of the lease, making sure details such as how revenue is reported, how the turnover is calculated, and what constitutes ‘gross sales’ are dealt with thoroughly. This clarity helps avoid disputes and allows both parties to move forward with confidence.
Why choose Moore Barlow for your turnover lease?
With our deep understanding of commercial property law, Moore Barlow provides invaluable support in drafting and negotiating turnover leases. We recognise that this type of lease requires careful consideration. Our proactive approach ensures that both landlords and tenants have a clear, fair agreement that aligns with their business goals.
We are known for our ability to tailor solutions to suit the unique needs of each client, ensuring that the terms of the lease provide stability for landlords while offering flexibility for tenants to manage their business operations. By focusing on fairness and transparency, we help reduce the risk of future misunderstandings or disputes.
Who benefits from turnover leases?
Turnover leases are particularly beneficial for businesses in high-traffic areas, such as shopping centres, entertainment venues, and large retail spaces. For landlords, this lease structure offers an opportunity to share in the success of their tenants, while tenants benefit from a model that adjusts rent based on how well their business performs. This structure can also work well for restaurants, pop-up shops, and seasonal businesses that experience fluctuating sales throughout the year.
Moore Barlow assists clients from a range of industries. Whether you’re a landlord looking to create an attractive retail space or a tenant seeking flexibility in rent, our team ensures that your lease is aligned with your business goals and offers long-term benefits.
Contact us today
If you’re considering entering into a turnover lease or need advice on an existing agreement, Moore Barlow’s experienced commercial property lawyers are here to help. We provide expert guidance to ensure your lease is carefully structured to meet your needs, offering a fair, transparent arrangement that supports both your short-term and long-term objectives. Contact us today to discuss how we can assist with your turnover lease and ensure a successful, mutually beneficial agreement for both landlord and tenant.
Contact our commercial property team
Meet our team of commercial property solicitors
Jo Farr
Partner | Commercial Property, Real Estate, Land Development, Real Estate Finance
Richard Hughes
Partner | Commercial Property, Real Estate, Real Estate Finance
Julian Parkes
Partner | Commercial Property, Real Estate, Landed Estates and Farming
Callum Leary
Partner | Commercial Property, Real Estate, Real Estate Finance
Nellie van der Lande
Senior Associate | Commercial Property, Real Estate Finance, Rural Services
Sam Ho
Senior Associate | Commercial Property, Real Estate, Real Estate Finance
Sharon Mays
Senior Associate | Commercial Property, Real Estate, Land Development, Real Estate Finance
Nicola Donnelly
Associate | Real Estate, Plot Sales, Residential Property
Fiona Hampton
Chartered Legal Executive | Commercial Property, Land Development, Plot Sales
Helen Archibald
Consultant | Commercial Property, Real Estate, Land Development
Janice Taylor
Conveyancing Executive | Real Estate, Plot Sales, Residential Property
