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When Old Leases Meet Modern Retail

Posted on: June 25th, 2026 by Alanah Lenten

A High Court dispute between John Lewis and the landlords of Brent Cross has put a fundamental question under the spotlight: when retail evolves, do legacy leases evolve with it?

At the centre of the case is whether click-and-collect sales should count towards turnover rent, a model where tenants pay a base rent plus a percentage of store-generated revenue.

It might sound technical. In practice, it goes to the heart of how modern, omnichannel businesses operate.

The background: a lease from another era

The dispute stems from a 1979 lease, agreed decades before online shopping existed.

Under that lease, John Lewis pays a base rent plus a percentage of “gross receipts” once turnover passes certain thresholds. The definition of those receipts includes orders “received or filled at or from the premises”, language originally designed to capture mail and telephone sales.

Today, that wording is being stress-tested against click-and-collect.

The landlords argue that online orders collected in-store, fulfilled from the store, or even initiated in-store should be captured as turnover. John Lewis takes the opposite view: that the sale happens when goods leave the distribution centre, meaning the store is simply a collection point.

Same clause. Very different commercial consequences.

Why this matters

This is more than a rent dispute. It reflects a broader tension between legacy contracts and modern business models.

Retail is no longer neatly split between “in-store” and “online”. For many businesses, the customer journey spans both, browsing online, purchasing digitally, collecting in person.

The problem is that many leases were never drafted with that reality in mind. As this case shows, even seemingly clear wording can become ambiguous when applied to new channels.

So what does this mean in practice for businesses?

  1. Old drafting creates modern risk
    Leases that pre-date e-commerce often rely on broad wording intended to capture indirect sales. That same wording may now be argued to include click-and-collect or other omnichannel activity, depending on how it’s interpreted.
  2. Data is now part of the deal
    Turnover rent only works if sales can be tracked and attributed clearly. In an omnichannel model, that means distinguishing between online, in-store, fulfilled-from-store and fulfilment-centre transactions. Without that clarity, disputes become almost inevitable.
  3. Commercial positions are diverging
    Landlords are increasingly focused on capturing value linked to physical space, particularly where stores play a role in fulfilment or customer experience. Tenants, meanwhile, are focused on ringfencing digital revenue and avoiding double counting.

This case is a reminder that leases are not static documents. Where turnover rent is in play, both sides are now expected to grapple explicitly with omnichannel trading, from click-and-collect to delivery, returns and fulfilment.

Because in modern retail, where a sale is made is no longer obvious. And if it isn’t clear in the lease, it will be argued later.

For more details of this case see our article here.

 

Important ESG Clauses Entering Commercial Leases

Posted on: June 23rd, 2026 by zhewison

Over the last few years, environmental, social and governance (ESG) considerations have moved from being a desirable extra to a core driver in commercial real estate. A building’s ESG performance depends not only on the owner’s investment strategy and asset management, but also on how occupiers use, fit out and operate their premises. For that reason, the lease has become the principal document through which ESG responsibilities are allocated, monitored and, where necessary, enforced.

Why ESG Clauses Matter

Sustainability is now shaped by regulatory pressure, investor expectations, lender requirements and occupier demand for better-performing buildings. In practice, modern lease drafting is increasingly concerned with energy efficiency, environmental performance and the long-term management of assets. Many ESG negotiations are therefore not simply about principle, they are about allocating the cost and responsibility of achieving sustainability targets between landlord and tenant.

Energy and Environmental Data Sharing

One of the most common and important ESG provisions is the obligation to share energy and environmental data. These clauses typically require the parties to provide information about energy usage, utilities consumption, waste management and other environmental performance metrics. They are significant because they provide the foundation for wider ESG monitoring. Without reliable data, landlords and investors cannot set targets, measure progress or identify where improvements are needed across a portfolio. From the tenant’s perspective, however, these obligations can raise concerns about administrative burden, confidentiality and how operational data may ultimately be used. Even so, relatively straightforward reporting obligations can have major practical significance because they support broader compliance and sustainability strategies.

Collaboration and ESG Strategy Clauses

Historically, green lease clauses were often light-touch and one-sided, usually restricting tenant behaviour or reserving rights for landlords to carry out upgrades. Modern drafting is more collaborative. It increasingly requires landlords and tenants to cooperate on sustainability initiatives, act consistently with environmental objectives, and use reasonable endeavours to improve a building’s environmental performance. Although these provisions can be difficult to enforce if they are expressed only in general terms, they are still important because they establish a shared ESG framework within the lease. In that sense, they often act as the starting point on which more specific and measurable obligations are built.

Alterations, ESG Works and Cost Recovery

Another major area of ESG drafting concerns tenant fit-out and alterations. Clauses increasingly restrict works that would reduce an EPC rating, require the use of sustainable materials, limit the installation of energy-intensive equipment, or prevent interference with building systems designed to improve environmental performance. Alongside these restrictions, modern institutional leases often reserve rights for landlords to enter premises and carry out sustainability upgrades aimed at improving energy efficiency or wider environmental performance. These rights are important from an asset management perspective because they enable buildings to be upgraded over time without being wholly dependent on tenant consent. The commercially sensitive issue, however, is often not whether such works should be done, but who should pay for them. Service charge recovery for ESG improvements has therefore become one of the most negotiated parts of modern green leasing. Landlords commonly seek flexibility to recover the cost of energy-efficient upgrades, decarbonisation works and other environmental improvements, while tenants, particularly short-term occupiers, may resist contributing towards expenditure that appears primarily to enhance the long-term value of the landlord’s asset. This tension has led to more nuanced approaches, including payback models under which a landlord recovers the cost of improvements only to the extent that those works generate measurable savings for the tenant over time.

Takeaways

ESG clauses are significant not only because of regulatory developments, but also because they reflect changing expectations about how commercial buildings are owned, managed and occupied. Leases are now central to delivering sustainability in practice. As ESG requirements become more detailed and more closely tied to value, funding and compliance, a clear understanding of these provisions will be essential for landlords, tenants and their advisers alike.

If you are a landlord or tenant and would like advice on ESG clauses in commercial leases, please contact a member of our Commercial Real Estate team.

Brent Cross v John Lewis Turnover Rent Dispute and Implications on Landlords and Tenants

Posted on: May 6th, 2026 by Ella Darnell

John Lewis is being sued in the High Court by the current and past landlords of London’s Brent Cross Shopping centre (property company Hammerson and Standard Life Investments) over whether click-and-collect sales should be included in turnover rent calculations.

This case serves as a good example of how disputes can occur where leases pre-date the internet. It also shows the importance of careful drafting of the definition of “turnover” and “gross receipts”.

What is turnover rent?

Turnover rent is a commercial lease structure where rent is calculated, wholly or partly based on a percentage of the gross sales generated by a tenant’s business at that location.

It provides a fair-sharing approach for risks, reducing overheads for retailers in tough times while allowing landlords to participate in successful trading.

What is this case about?

The dispute centres on a 1979 lease agreement which pre-dated the internet and was agreed three decades before John Lewis offered click-and-collect services. John Lewis must pay a base rent of £30,000 a year, plus a cut of “gross receipts”. This works out that the retailer must pay the landlord 0.75% of the store’s gross receipts when annual turnover from the store exceeds £4 million. If annual turnover exceeds £10 million, the payment increases to 1% of turnover.

The lease specifies that “mail, telephone or similar orders received or filled at or from the demises premises or directed thereto” contributed to gross receipts. The claimants are seeking payment of backdated rents arguing that “gross receipts” as defined in the 1972 lease, should include online sales that are collected at the Brent Cross store, as well as online stores that are fulfilled from the store. Orders that are made in store, but which are fulfilled later from one of John Lewis’s delivery depots should also be included.

The defendants are arguing that online sales and related collection charges are exempt from turnover rent calculations because the transaction is completed when the product is dispatched from its main distribution centre to the relevant store, which means by the time the product has been collected by the customer, the product has already been sold. There are suggestions that they have also argued that the original lease could not possibly cover click-and-collect sales, since the internet had not been invented then.

Practical implications for landlords and tenants

  • Expect disputes where leases pre-date e-commerce:

Older turnover-rent definitions sometimes try to capture non-in-store trading via wording such as “mail, telephone or similar orders received or filled at or from the premises”. This case shows that legacy wording may be argued to cover modern channels such as click-and-collect and ship-from-store, depending on the drafting.

  • Advisable for landlord’s to review (and, where possible, tighten) the definition of “turnover”/“gross receipts”:

If turnover rent is material to value or funding, landlords will want explicit treatment of (i) online orders collected at the store; (ii) online orders fulfilled from the store; (iii) in-store orders later fulfilled from a depot; and (iv) collection/delivery/handling fees. Click-and-collect is often included in turnover-rent definitions, but clarity is key.

  • Advisable for tenants to ring-fence digital revenue and avoid double counting:

Tenants typically push for clear exclusions (and accounting mechanics) so revenue is counted once, and so purely online sales are not treated as store turnover merely because the store is a collection point. Where the inclusion of click-and-collect and/or other omnichannel sales in turnover is accepted, tenants may seek a lower percentage or higher threshold to reflect the different economics.

  • Data, reporting and audit rights become central:

 Turnover-rent leases usually require periodic sales reports and allow landlord verification/audit. Both sides should ensure systems can produce the required splits (in-store vs online, collected vs delivered, fulfilled from store vs depot). Landlords often require transparency, which is sometimes driven by lender requirements, while tenants may have sensitivity/practicality concerns.

  • Drafting takeaways for new leases or renewals:

It would be advisable to agree Heads of Terms that expressly address omnichannel issues i.e click-and-collect, ship-from-store, returns processed in-store, gift cards/vouchers, discounts, VAT treatment, refunds/cancellations, and the timing of when a sale is treated as “made” (order, dispatch or collection).

The Brent Cross v John Lewis dispute highlights how older turnover-rent drafting can struggle to accommodate modern retail models. For both landlords and tenants, the practical lesson is to define “turnover”/“gross receipts” clearly (including how click-and-collect and fulfilment are treated) and ensure the reporting and audit mechanics match the tenant’s sales systems.

For specialist advice on turnover rent drafting, disputes and retail lease strategy, please contact Lawrence Stephens.

The End of Upwards-Only Rent Reviews: The English Devolution and Community Empowerment Act 2026 Receives Royal Assent

Posted on: May 1st, 2026 by Ella Darnell

On 29 April 2026, the English Devolution and Community Empowerment Act 2026 (the Act) received Royal Assent.

The Act includes a controversial ban on upwards-only rent reviews (UORR) in all business tenancy leases in England and Wales, with the aim to protect high street tenants and encourage economic growth.

The ban on UORR is not currently in force and requires secondary legislation to take effect, which is expected in 2027.

Key takeaways

  • Landlords will be prevented from including upwards-only rent reviews in commercial leases, where the reviewed rent cannot be ascertained when the lease is granted.
  • It will apply to all “business tenancies” whether or not the lease is contracted out of the Landlord and Tenant Act 1954.
  • The ban will apply to all new leases granted after the relevant section of the Act comes into force, unless the lease was entered into pursuant to an agreement which completed before the ban took effect.
  • Lease renewals for existing tenancies entered into after the ban comes into force will also be caught if:
  • there was no agreement for lease prior to the ban coming into force; or
  • the renewal lease is granted pursuant to a “renewal arrangement” made on or after 17 March 2026:

This will capture renewal leases where, for example, either the landlord or tenant has exercised a right in the original lease or contained in a separate agreement which requires the other party to grant or take a new lease.

  • Clauses in existing leases which require a sub-lease to include an UORR will be void.
  • Whilst the rent review process is currently predominantly led by landlords, tenants will also have a right to initiate rent reviews once the legislation is enacted.
  • Leases renewed under Part 2 of the Landlord and Tenant Act 1954 are also caught by the new provisions.
  • Parties will not be able to contract out of the ban.

What does this mean in practice?

Given the likelihood of landlords wanting to protect investment returns, the Act may result in higher initial rents and shorter lease terms.

Alternative rent review mechanisms which we may start to see include:

  • Index linked rent reviews:

An index linked rent review adjusts rents based on inflation indices like CPI or RPI. Opting for an index linked rent review mechanism which allows the revised rent to go up or down presents a prudent option for both parties, keeping rent in line with inflation.

However, given the current economic climate and inflationary trends it appears unlikely that tenants are going to experience falling rents any time soon. Index linked rents also reinforce the importance of effective cap and collar provisions, to mitigate economic volatility. The Government has only recently stated their intention to consult on caps and collars, so we await the outcome of these discussions.

  • Stepped rents:

Stepped rents or fixed uplifts will not be impacted by the ban (as the level of rent is known at the start of the term) and present another viable alternative to landlords seeking to protect their investments.

An increased use of stepped or fixed rents is likely to have significant commercial consequences, including increased landlord pressure for shorter leases and additional break rights.

The ban on UORR represents a significant shift in the commercial property market.

If you would like to discuss how the ban may impact your business or future transactions, please get in touch. 

Lawrence Stephens Advises EXALT on New Manufacturing Unit in Wood Green

Posted on: February 23rd, 2026 by Ella Darnell

Lawrence Stephens has advised juice brand EXALT on the lease of a new unit in Wood Green. 

Founded in 2019 by Charlie and Dan Wilson-Vaughan, EXALT is a London based performance nutrition company known for creating the UK’s first fresh, ready-to-drink protein smoothies without pasteurisation and preservatives. With growing consumer demand for non-ultra-processed food and the continued rise of the health and wellness sector, the brand has experienced rapid and sustained success since its launch. 

EXALT has also built an impressive footprint in professional sport. The brand now works with 30% of the Premier League and is the official Sports Nutritional Drinks Supplier for Tottenham Hotspur Football Club and is an Official Partner of Brighton and Hove Albion Football Club. 

The new manufacturing unit in Wood Green is a big milestone for EXALT’s growth journey. The increased manufacturing capacity will enable the business to scale production significantly and accelerate the development of new product lines as demands continue to grow. 

This deal was led by Director and Head of Retail Nickhil Mandora, and supported by Solicitor Mohammad Hammoud. 

Charlie Wilson-Vaughan, founder of EXALT commented:  

“Working with Nickhil Mandora and Mohammad Hammoud of Lawrence Stephens was an outstanding experience from start to finish. Their expertise, attention to detail, and proactive guidance were instrumental in securing our new warehouse in Wood Green which is crucial to our big growth and investment plans. They navigated every stage of the process with professionalism and clarity, giving us complete confidence throughout. We’re grateful for their dedication and would highly recommend them to any business seeking reliable and commercially minded legal support.” 

Nickhil Mandora added: 

“We’re delighted to have advised EXALT on their newest site in North London; an addition that will no doubt aid their impressive growth trajectory. Working with a client who have achieved so much at a relatively early stage in their corporate journey, and whose potential for further success is seemingly limitless, has been a pleasure and we look forward to continuing our partnership.” 

You can read more about the Retail team’s services here.

Lawrence Stephens completes over £33 million worth of transactions in pre-budget sprint

Posted on: November 28th, 2025 by Alanah Lenten

November was an exceptional month for Lawrence Stephens, culminating in an intense surge of activity ahead of the Chancellor’s budget announcement. Pre-budget market speculation prompted many clients to accelerate their transactions to avoid potential negative impacts. This created significant pressure on our teams to complete deals within very tight timeframes.

In the days leading up to Rachel Reeves’ announcement, our teams successfully completed transactions worth over £33 million. Notably, our Corporate and Commercial team alone closed seven transactions the day before the budget, including five acquisitions, one sale, and a share restructure, totalling in excess of £15 million. Meanwhile, the Commercial Real Estate team responded to concerns about possible capital gains tax changes by completing £16.5 million worth of deals, including the sale of two industrial investment properties and the purchase of a mixed-use building.

Jeff Rubenstein, Head of Corporate and Commercial, commented:
“I am incredibly proud of how our team rose to the challenge. We have built a department designed to thrive under pressure, and this achievement shows the strength, resilience, and expertise we bring to every transaction.”

Stephen Messias, Director in Commercial Real Estate and a Lawrence Stephens founding partner, added:
“The scale and complexity of the work completed in such a short timeframe is a testament to the capability of our team. Delivering a number of challenging transactions under these circumstances required precision, collaboration, and unwavering commitment to client objectives.”

These achievements were made possible through exceptional collaboration with all stakeholders and a relentless focus on meeting client requirements under challenging circumstances. November’s success reflects not only the strength of our expertise but also our ability to deliver outstanding results when it matters most.

Upward-Only Rent Reviews Banned: What Business Owners Need to Know

Posted on: November 26th, 2025 by Alanah Lenten

The UK Government is shaking up commercial leasing. As part of the English Devolution and Community Empowerment Bill, Upward-Only Rent Review (UORR) clauses will be banned in new commercial leases, a move designed to support small businesses and revitalise high streets.

If you’re a business owner negotiating a lease, here’s what you need to know.

What’s Changing?

From the moment this legislation takes effect, any clause in a new or renewal lease that prevents rent from decreasing will be unenforceable. This applies whether or not the lease is contracted out of the Landlord and Tenant Act 1954.

Existing leases won’t be affected, but going forward, landlords won’t be able to lock tenants into rent levels that only go up where, at the start of the lease, that level of rent is not known and cannot be determined.

Why It Matters to You

If you’re running a business from leased premises, this is a significant shift. UORRs have long been a thorn in the side of tenants, especially independents and SMEs, who’ve found themselves stuck paying above-market rents during downturns.

This reform transfers risk from tenant to landlord, meaning landlords are likely to follow the approach outlined below. You may however have more flexibility to negotiate rent based on market conditions when agreeing a new or renewal lease.

What Landlords Might Do Next

Landlords won’t take this lying down. Expect to see:

  • More aggressive initial rent negotiations to offset future uncertainty.
  • Shorter lease terms, often contracted out of the 1954 Act, which could mean more frequent relocations or renegotiations for tenants.
  • Pre-agreed stepped rents, where rent increases are fixed from the outset, as these won’t be caught by the ban.
  • Index-linked reviews replacing upwards only open market reviews, offering predictability but potentially less room for negotiation.

Also, don’t be surprised if tenant-friendly perks like break clauses or rent-free periods become harder to secure.

What You Should Do

If you’re entering into a new lease or renewing an existing one:

  • Review the rent review clause carefully, make sure it allows for downward adjustments.
  • Consider stepped or indexed rent structures if they offer better predictability.
  • Negotiate hard at the outset, landlords may front-load rent to hedge against future drops.
  • Get advice, a good commercial property solicitor can help you navigate the new landscape.

Final Thought

This reform is a win for business owners, but it’s not without trade-offs. As the market adjusts, lease negotiations may become more complex. The key is to stay informed, negotiate smart, and structure leases that support your business’s long-term viability.

If you’d like to talk through how this change might affect your next lease negotiation, our Commercial Real Estate team is here to help.

Read the rest of The Fineprint edition 2 here. 

Lawrence Stephens Advises Fashion Retailer GARAGE on Their Flagship Store on Oxford Street, London

Posted on: November 11th, 2025 by Ella Darnell

Lawrence Stephens has advised fashion retailer GARAGE on their flagship store on the world-renowned Oxford Street, London.

Founded in 1975, GARAGE is a Canadian fashion retailer with a strong presence across Canada and the United States, operating over 230 worldwide store locations. The brand is known for its youthful, trend-driven collections that cater primarily to younger women.

GARAGE’s expansion into the UK marks a significant milestone in the brand’s international growth strategy. The Oxford Street store is not only GARAGE’s flagship store location in Europe, but also a strategic move that places the brand at the heart of London’s retail scene. Oxford Street is one of Europe’s premier shopping destinations and London’s busiest street, thus the flagship location will allow the brand to quickly build brand visibility and connect with a diverse, high-footfall audience.

The deal is indicative of renewed confidence in brick-and-mortar retail, particularly in prime shopping destinations. It may serve as a signal for other North American fashion retailers to test the UK market, suggesting the potential of a wider trend of cross-Atlantic retail expansion.

The Oxford Street letting was led by Director and Head of Retail Nickhil Mandora and supported by Sophie Levitt. This adds to Lawrence Stephens’ growing portfolio of high-profile retail clients, which includes brands such as Carolina Herrera, Arc’teryx and Salomon. We are delighted to support GARAGE in this new chapter and look forward to seeing the brand thrive in the UK.

Nickhil Mandora added:

“We are delighted to have acted for GARAGE on their introduction to the UK market. The female fashion market in the UK is particularly strong and is no doubt strengthened by the entry of such a well-established North American brand, who already have a cult following here. Oxford Street, London, is the perfect home for GARAGE and we look forward to strengthening our partnership with them on their expansion within the UK.”

You can read more about the Retail team and their services here.

Lawrence Stephens Advises Maidenhead Aquatics on Acquisition of New Nottingham Store

Posted on: October 15th, 2025 by Ella Darnell

Lawrence Stephens has advised fishkeeping and aquatics supplier Maidenhead Aquatics on the acquisition of their new store at 66 Castle Boulevard, Nottingham. This strategic move marks a consolidation of the company’s presence in the city and reinforces its position as an industry leader. 

Founded in 1984, Maidenhead Aquatics has evolved into the UK’s premier destination for fishkeeping and aquatic supplies. With over 130 stores nationwide and a well-established online platform, the company is continuing to expand its footprint. With the acquisition of the new store in Nottingham, Maidenhead Aquatics is further strengthening its presence in the region and displaying their commitment to growth in the aquatics sector. 

Supervising Partner in the Commercial Real Estate team, Matt Hind added:

“We are delighted to have acted for Maidenhead Aquatics on this transaction.  From start to finish my colleague Mo has been instrumental in driving this deal for Maidenhead Aquatics. He has done a terrific job at delivering a successful result for the client and supporting them in their expansion.”

Solicitor Mohammad Hammoud commented:

“Maidenhead Aquatics now have a large new location where they can continue their excellent work and growth in the historic city of Nottingham. Their growth is a testament to their commitment to being the best in the aquatics business and I look forward to seeing them thrive in their new store.”

Sam Kent, a Partner at Maidenhead Aquatics commented:

“Working with Mohammad Hammoud at Lawrence Stephens to get this acquisition completed has been so efficient. Complex issues were dealt with, explained fully and communication was outstanding throughout. I wouldn’t hesitate to use Mo in the future.”

This deal was handled by Mohammad Hammoud and assisted by James Parker. To read more about the Commercial Real Estate team and their services, please click here.

Lawrence Stephens acts for premium retailer MAKSU in securing lease of new flagship store on King’s Road, London

Posted on: August 28th, 2025 by zhewison

Lawrence Stephens has advised high-end retailer MAKSU on the lease of their new flagship store at 96 King’s Road, London, marking the brand’s second UK location and a significant step in its international expansion.

Founded in 2019, MAKSU is a Spanish-Turkish luxury womenswear brand known for its bold prints, timeless craftsmanship and Mediterranean-inspired elegance. The opening of this new store follows the successful launch of their first UK store in Mayfair in 2024, and it reflects the brand’s growing global presence and commitment to establishing a strong presence in London’s fashion landscape.

With MAKSU’s new flagship store location on the iconic King’s Road, they are positioned at the heart of one of London’s most prestigious and iconic retail destinations. Although ongoing economic challenges and concerns surrounding the future of the UK high street, MAKSU’s expansion into this prime location highlights the resilience of the luxury retail sector and affirms London’s status as a thriving hub for high-end fashion.

This deal was led by Head of Retail and Director Nickhil Mandora, with support from Solicitor Mohammad Hammoud. The deal is a further example of Lawrence Stephens’ position as a leader in the retail sector, having also recently advised major premium retail brands including Arc’teryx and Salomon.

Nickhil Mandora commented: “MAKSU have found a stunning new home on the King’s Road in London and we are delighted to have assisted them on the latest stage of their European growth. Cadogan’s focus on top-tier brands in this area is a strong endorsement of London’s position right at the top of the fashion market.”

For more information on the Retail team and their services, click here.

Upward-Only Rent Reviews Banned: What UK Leaseholders Need to Know

Posted on: July 17th, 2025 by Ella Darnell

As part of the newly introduced English Devolution and Community Empowerment Bill, the UK Government has unveiled plans to outlaw Upward-Only Rent Reviews (UORRs) clauses in commercial leases — a move that could reshape the future of landlord-tenant dynamics.

The ban will apply to new agreements where, on the date the lease is entered into, the new rent following a rent review is not known and cannot be determined. It will not impact those leases already in place however, if implemented, any clause in a new or renewal commercial lease, whether contracted out of the 1954 Act or not, requiring the rent not to decrease will be unenforceable.

The proposal, aimed at revitalising high streets and supporting small businesses, has already been met with mixed reception across the property sector and The British Property Federation has criticised the lack of industry consultation.

What Are Upward-Only Rent Reviews?

UORRs are a common feature in commercial leases in England and Wales. UORRs allow rent to increase or remain static at review dates – typically every five years – but never decrease, even if market rents fall. This industry accepted approach to commercial leasing has long been favoured by landlords for providing income certainty and supporting property valuations.

Tenant Perspective: A Welcome Relief

For tenants, particularly small and independent businesses, the proposed ban is likely to be regarded as a positive development. UORRs have incurred criticism for binding tenants to unsustainable rent levels, especially in volatile markets. However, the outlaw of UORRs will effectively transfer the risk from tenant to landlord.

As such, a decision will need to be made by landlords as to whether to adopt a fixed rent or to permit rent variation through a rent review clause that accommodates both rises and reductions in rent throughout the term of the lease.

Landlord Perspective: A New Risk Landscape

Landlords, however, will almost certainly have concerns about the reform. Whilst rental income from commercial leases is currently considered a stable and predictable revenue stream, the prohibition of UORRs will introduce greater volatility in cashflow. Furthermore, industry stakeholders will argue that the outlaw of UORRs will undermine the perceived security of rental income and place prospective commercial property developers at a disadvantage when seeking finance.

Landlords may therefore choose to obviate the balance between risk and reward by abandoning open market review clauses and opting for the stability provided by index linked reviews.

What Happens Next?

The proposed ban on upward-only rent reviews marks a significant shift in UK commercial leasing. Whilst it aims to give tenants greater flexibility and affordability, landlords face a more complex and potentially less predictable income landscape.

In order to counteract this, it is possible that landlords will take a more aggressive stance at the outset of negotiations to mitigate the risk of stagnant or falling rents. Similarly, the inclusion of tenant-friendly terms, such as break clauses and rent-free periods, may become less prevalent as landlords reassess their leasing strategies.

Alternatively, landlords may opt for shorter leases which are to be contracted out of the Landlord and Tenant Act 1954. The potential drawback of this approach is that the cost of reletting the property will likely be passed to the tenant.

We may also see more pre-agreed stepped rents being negotiated (such increases would not be caught by the ban as the rent would be known at the outset) and this would give both tenants and landlords certainty at the start of a lease as to how much rent will be payable at any given time during the lease term.

Ultimately, the success of this legislative change will depend on how effectively the market adapts to a model that seeks to balance commercial flexibility with financial viability. As the Bill progresses through Parliament, stakeholders on both sides will need to stay alert to legislative developments and prepare for a new era in lease negotiation.

For more information on our Commercial Real Estate team, click here.

Authors

Nickhil Mandora

Louisa Hartley

Sophia Dixon

Lawrence Stephens advises Salomon on store at Battersea Power Station

Posted on: June 3rd, 2025 by zhewison

Nickhil Mandora, Director at Lawrence Stephens, has advised Salomon on their latest UK store at Battersea Power Station. This is the third UK store Salomon has opened in the past year, with Nickhil advising on all lettings.

Founded in 1947 in the French Alps, Salomon is an outdoor brand creating high-performance gear for running, hiking, skiing, and adventure. The Battersea Power Station store will be focused on footwear, offering a collection of sport-style, running, and hiking shoes.

This letting solidifies Battersea Power Station’s status as an iconic and desirable shopping destination, home to lifestyle brands favoured by consumers.

Nickhil Mandora: “We are delighted to assist Salomon on their latest UK retail space in the iconic Battersea Power Station, marking a hat trick of stores in the capital for the brand. Salomon have been consistently innovating not only the products they offer but the services provided in-store and we are excited to continue our partnership with them”.

For more information on our services and expertise in the commercial real estate sector, please click here.