Top 10 Retail Leasing Mistakes and How to Avoid Them

Figuring out your retail lease can be an important strategic helper or harmer for your business, especially if you’re operating in a competitive city like Melbourne. You might be opening your first shop or relocating your store to a new suburb, but avoiding common pitfalls can save you time, stress, and thousands of dollars.

At LeaseWise, we’ve reviewed hundreds of commercial leases, and we know where businesses tend to trip up. Here are the top 10 retail leasing mistakes and how to avoid them if you’re looking for retail leasing in Melbourne.

1. Not Understanding the Full Cost of the Lease

Many retailers focus on base rent but forget to factor in outgoings like water, council rates, strata fees, and cleaning. Always request a full breakdown of all additional costs upfront.

2. Signing Without Legal or Expert Review

Even seemingly simple clauses can have complex implications. Have your lease reviewed by retail lease experts in Melbourne to ensure you understand the terms and can negotiate better outcomes.

3. Overcommitting to a Long Lease

While long leases can offer stability, they’re risky for newer or growing businesses. Match your lease length with your business plans, and ask for a shorter term with renewal options if you’re not sure where you will be in the next year or few years.

4. Ignoring the Break Clause

A fair break clause gives you flexibility if your situation changes. We don’t recommend signing a lease without one, especially if you’re testing a new retail concept or location.

5. Missing the Fit-Out Rent-Free Period

Landlords often offer a rent-free period while you fit out your retail space for lease. Take advantage of this!

6. Not Checking Permitted Use Wording

Your business activities must match what’s listed under the ‘permitted use’ clause. Make sure it covers your full offering, which will include any future services or products you might add.

7. Unclear Make-Good Obligations

Vague make-good clauses can result in costly reinstatement works when you leave. Try to clarify what’s required and negotiate the terms in writing before signing.

8. Overlooking Repair Responsibilities

Retailers are often surprised to learn they’re responsible for things like air conditioning or structural repairs, so make sure your lease clearly outlines who is responsible for what.

9. Failing to Understand Rent Review Terms

Rents can increase annually based on CPI, fixed percentage, or market review. Make sure the method is clear and predictable so you can budget accurately for the foreseeable future. 

10. Choosing the Wrong Location

That perfect shopfront may not make sense if foot traffic, surrounding businesses, or parking don’t match your customer base. Before signing, research the area thoroughly. 

At LeaseWise, we specialise in retail leasing for small to medium-sized businesses. Our team takes care of lease reviews and offers negotiation support, making your retail lease work for you, both now and into the future.

Get in touch with LeaseWise today to avoid these top ten retail leasing mistakes in Melbourne.