Is turnover rent the new way forward?

Elizabeth Shaw Elizabeth Shaw 08 October 2020

High street retailer New Look announced it has won approval from its creditors via a Company Voluntary Arrangement (CVA) for 400 of its store rents to be linked to turnover. 

Under the CVA the remaining 68 stores will move to a zero rent. 

Liz Shaw, director at Wake Smith Solicitors, looks at the change.

“New Look’s success may well encourage other retailers to try to follow with a similar approach. 

“This agreement means that its landlords will have to accept a percentage of a shop’s revenue for their rent instead of relying on a fixed lease.  New Look argued that the new model reflected the wider retail market.”

New Look’s decision has been criticised by the British Property Federation who said “CVAs were designed to be short term as part of a wider rescue package to support businesses in genuine distress. 

Liz added: “But the result for New Look clearly demonstrates how the process is now wrongly being used as a weapon by businesses to rip up leases permanently.

“The challenging period for landlords continues; even where tenants businesses survive the current crisis, it is likely that there will be far tougher negotiations over the terms of new leases. 

“There is also conflicting case law under the Landlord and Tenant Act 1954 as to whether the courts have jurisdiction to order a turnover rent. 

“More important, market evidence is likely to be important in such cases, and so landlords who have agreed turnover rent arrangements with their tenants, even if intended to be temporary, need to bear in mind that this may impact the future for different rent arrangements for a much longer term.”

For further advice on property legal matters contact Elizabeth Shaw at [email protected]



May 20212April 20212March 20219February 20218January 20219December 20208November 202014October 20209September 20208August 20203July 20208June 202016May 202013April 20209March 202016February 20209January 202012December 20199November 20199October 201911September 20197August 20194July 20196May 20198April 20196March 20193February 20195January 20194December 20186November 20185October 20183September 20185August 20184July 20189June 20184May 201810April 20185March 20184February 20184January 20183December 20175November 20178October 20177September 20179August 20175July 20176June 201710May 20176April 20178March 201711February 20177January 201713December 20169November 20167October 201610September 201611August 20166July 20167June 20163May 20162April 20166March 20162February 20164January 20165December 20153November 20155October 20156September 20156August 20157July 20157June 20157May 20156April 201510March 20156February 201510January 20156December 20145November 20144October 20142September 20143May 20144March 20146February 20144January 20142December 20132November 20133September 20134July 20132June 20132May 20133April 20131March 20133February 20133January 20136December 20121November 20123October 20122August 20122July 20128June 20123April 20123March 20121January 20124December 20112November 20111October 20112September 20113August 20113July 20117June 20119May 20117April 20115March 20119February 20118January 20111December 20101October 20102September 20102August 20103July 20106June 20101May 20102April 20106March 20102February 20103January 20102December 20095November 20092October 20092September 20092August 20091July 20095June 20095May 20093April 20093March 20093February 20091January 20092November 20082October 20082September 20081August 20083July 20081January 20082

Featured Articles

Contact us