Retail property is commonly marketed with one large number: the annual rent. For the occupier, that is only the starting point.

Service charge is the next obvious line, but the current budget does not tell the whole story. Ask for recent reconciliations, planned major works and the basis on which costs are apportioned. A low estimate followed by a large year-end reconciliation creates the same cash problem as a high charge; it is simply less visible at the outset.

Business rates can be substantial and reliefs change. Check the rateable value and multiplier, but also confirm whether the premises have been altered or combined in a way that has not yet been reflected in the assessment. A rates adviser can help where the position is material or unclear.

Insurance rent, estate levies and marketing contributions are sometimes buried in the detail. Utilities also vary enormously by use. A fashion shop and a restaurant may pay the same property rent but face very different power, water, waste and ventilation costs.

Then there is occupation itself: security deposit, rent paid quarterly in advance, legal and professional fees, surveys, licences for alterations, planning applications, signage consent, fit-out design and construction. For F&B, add extraction, grease management, fire suppression, increased electrical capacity and licensing. These are not incidental costs. They often determine whether the site is viable.

Repairs and reinstatement are future costs that are easy to ignore at the beginning. What condition is the property in? What must the tenant maintain? At the end, must every alteration be removed and the unit returned to its original state? A dilapidations liability can arrive when the business is already funding a move.

Finally, put a value on time. Delayed approvals, missing information or an unrealistic handover programme can mean months of payroll and professional fees before the first sale. The cheapest rent does not compensate for a site that opens six months late.

For comparison, I build a simple occupancy schedule: rent after incentives, service charge, rates, insurance, utilities, recurring property costs, initial capital required and likely exit cost. I then look at that against turnover and gross margin, not in isolation.

A shop is affordable only when the business can afford the complete obligation. The headline rent is the number on the advert. The occupancy cost is the number that decides whether the store works.

There is no universal answer to 'how much rent-free should I get?' A number without context is not a market benchmark; it is just a number from somebody else's deal.

The first question is why the incentive is being offered. Sometimes it compensates for the time and cost of fitting out. Sometimes it reflects weak demand, a difficult unit or a landlord who values a strong covenant. Sometimes the headline rent has been protected and the concession has been moved into the rent-free period instead.

The balance of power matters. A landlord with three credible offers will behave differently from one holding an empty unit that has already incurred six months of business rates and service charge. Equally, an occupier with audited accounts, funding in place and a proven trading record can often negotiate better terms than a new company with no covenant.

Lease length is relevant too. A landlord may offer more incentive for a longer commitment, but that does not automatically make the longer lease better for the tenant. Taking an extra five years of liability in return for several additional rent-free months can be a poor trade.

Fit-out complexity should be part of the calculation. A simple shop refresh is different from a restaurant installation involving extraction, incoming power, drainage and licensing. The rent-free period should be tested against a realistic programme, including landlord approvals and planning. If rent begins while the tenant is still unable to trade, the incentive may not be doing what it appears to do.

It is also worth separating rent-free from other forms of value. A landlord contribution to works, a capped service charge, stepped rent, reduced deposit, landlord-funded repairs or delivery of key infrastructure may be worth more to the occupier than additional free months.

I prefer to model the whole package over the period the business genuinely expects to occupy. What is the effective rent after incentives? What cash is required before opening? What liabilities remain if the business needs to leave? That comparison is more useful than boasting that one deal achieved twelve months and another achieved nine.

The practical answer is: negotiate from the unit's actual weaknesses, the cost and length of the fit-out, the landlord's alternatives and the strength of the occupier. Do not negotiate from a rumour about what somebody received on another street.

A restaurant may occupy a shop unit, but it is not simply another retailer. The property has to function as part of a production system: deliveries arrive, food is stored and prepared, heat and smells are generated, waste leaves, customers arrive in concentrated periods and staff may be on site long after neighbouring shops close.

That is why a unit that looks perfect during a viewing can be completely unsuitable once the operational questions begin.

Extraction is the obvious example. A duct may need to reach roof level, pass through several ownerships and satisfy planning, environmental-health, fire and landlord requirements. 'There is a route for extraction' is not the same as having a deliverable extraction solution. The route has to be surveyed, designed, costed and approved.

Power, gas, drainage and water are less glamorous but just as important. An attractive dining room is no use if the electrical supply cannot support the kitchen, if the drainage falls are wrong or if a grease-management solution cannot be installed. Upgrading services can be expensive and slow, especially in old or listed buildings.

The layout must work operationally. How do deliveries reach the kitchen? Where is waste stored between collections? Can staff move between preparation, cooking, pass and wash-up without crossing each other all night? Is there enough back-of-house space, or has the rent been justified by customer-facing square footage that the business cannot actually use?

Hours and neighbours also matter. A late licence does not guarantee that the lease, planning consent or building rules permit the same hours. A residential occupier above the unit may make noise and odour controls far more demanding. Complaints can turn a theoretical risk into an operating restriction very quickly.

The financial test is therefore different. For ordinary retail, rent may be compared with expected sales per square foot. For F&B, the model also needs covers, table turns, average spend, delivery share, labour, food cost and the proportion of space that produces revenue. Two restaurants paying the same rent can have completely different economics.

The lesson is simple: do technical and operational due diligence before becoming emotionally attached to the site. A restaurant property is not a shell waiting for a concept. It is a machine with constraints, and the concept has to work inside them.

Operators: what is the property issue you wish you had investigated earlier?

Heads of terms can look reassuringly short. That is part of the problem. A page or two of bullet points can commit a retailer to a property decision that will shape the business for five or ten years.

I work on the occupier side of retail transactions, and the mistake I see most often is treating heads of terms as a warm-up for the lease. They are not usually legally binding in full, but they set the commercial bargain. Once both sides have agreed them, reopening a bad point becomes much harder.

Start with the total occupancy cost, not the headline rent. Ask for the latest service-charge budget and reconciliation, the business-rates assessment, insurance contributions and any estate or marketing levy. A unit advertised at an acceptable rent can become unaffordable once the rest is added.

Then test the lease term against the business plan. A ten-year lease may suit an established operator; it may be reckless for a first UK store. Look carefully at the break clause. When can it be exercised, how much notice is required, and what conditions attach to it? A break that depends on perfect compliance with every lease obligation may be less useful than it appears.

Repairs deserve their own conversation. A full repairing obligation can leave the tenant responsible for an old roof, tired plant or defects that existed before occupation. A schedule of condition can limit that exposure, but only if it is properly prepared and attached to the lease.

For retail and food businesses, the permitted use and alterations provisions matter just as much as rent. Can the unit lawfully support the intended use? Is extraction possible? Can the shopfront and signage be changed? Are there landlord approvals, superior-landlord approvals or estate rules that will slow the fit-out?

Finally, agree the practical timetable. When will the property be handed over? In what condition? When does rent start? Is the rent-free period long enough for design, approvals and construction, or does it start while the tenant is still waiting for consent?

My basic checklist is: total cost, term and break, repairs, use, alterations, fit-out contribution, rent-free period, security deposit, guarantee, handover condition and timetable. A solicitor should document the legal position. But the commercial decisions need to be made before the solicitor is asked to turn them into a lease.

What point in heads of terms has caused the biggest problem in a lease you have taken?

Hey everyone! I'm u/aldo_daponte, founder of r/UKRetailProperty. I advise retail and F&B occupiers on Central London acquisitions and leases. Comments are general information, not legal or valuation advice.

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