What actually happens at a rent review
A rent review is a valuation exercise run inside the wording of one lease. The lease sets the date, the basis and the machinery. Evidence and negotiation decide the number. Most reviews settle by agreement, and the ones that do not go to a third party appointed under the lease.
Written by Alexia Swift-Cookson, Director, Head of Asset Management. Last reviewed September 2026.
The review date and whether time is of the essence
The lease names the review date and usually the procedure for starting the review. The starting point is that time is not of the essence for rent review machinery, so a late notice does not normally lose the increase. That presumption can be displaced by the wording, most obviously where the lease sets a deadline and states a consequence for missing it, or where a tenant counter-notice provision operates as a deeming clause.
We treat every review date as a hard date because the alternative is to rely on a presumption. Where a review is agreed after the date, the reviewed rent is normally backdated to it, with interest on the shortfall where the lease provides for it.
Upward-only provisions
Most institutionally drafted leases review to the higher of the passing rent and the open market rent at the review date. The passing rent is protected on the downside. The consequence is that an over-rented lease stays over-rented, the review produces nothing, and the tenant carries a rent above market until the term ends or a break is operated. An upward-only review is a floor rather than a source of growth.
The hypothetical letting
The reviewed rent is the rent that would be agreed on a letting of the premises on the terms the lease directs. That hypothetical letting is defined by its assumptions and its disregards, and those words decide the answer more often than the market does.
Assumptions commonly include vacant possession, a willing landlord and a willing tenant, a stated term, compliance with the tenant's covenants, and that the premises are fit for immediate occupation and use. A term assumption matters. A review on an assumed ten-year term values something different from a review on the unexpired residue of a short tail.
Disregards commonly include the occupation and goodwill of the sitting tenant, any effect on rent of tenant's improvements carried out at the tenant's own cost, and any effect of a rent-free period or other inducement that a new tenant would receive. Where improvements are disregarded, the owner reviews the building as it was let and not as the tenant has made it.
Comparable evidence and how it is assembled
The evidence is open market lettings of comparable premises around the review date. We assemble it from lettings we have transacted or are aware of, agency records, published deals, rating and lease data, and enquiry of the agents involved. Each comparable is analysed to a rate per sq ft on a consistent basis, then adjusted for zoning on retail, size, position on the pitch, specification and lease terms.
Incentives are the part that decides most retail reviews. A letting at a headline rent with nine months rent free is not a letting at the headline rent, and the adjustment for that is where the argument usually sits.
Negotiation
The parties exchange proposals and the evidence behind them. Reviews settle on the strength of evidence, on the calibre of the surveyor on each side, and on what the tenant wants from the building over the rest of the term. A tenant who is trading well and needs to stay has a weaker hand than a tenant with an imminent break.
The third-party referral
Where the parties do not agree, the lease provides for referral to an independent expert or an arbitrator, usually appointed by the President of the RICS if the parties do not agree an appointee. An arbitrator decides on the evidence and submissions put by the parties. An expert determines using their own knowledge and investigation, and is not confined to what the parties supply. Costs are at the appointee's discretion or as the lease directs, and a referral can cost more than the increase in dispute on a small lot.
What makes a review go well or badly for the owner
Reviews go well where the lease assumes a sensible term, disregards the tenant's improvements, and the pitch has produced recent lettings at higher rents with modest incentives. They go badly where the passing rent is already above market, where the tenant has improved the building at its own cost, where the only comparables are incentive-heavy deals, and where the review date is missed on a lease that makes time of the essence.
A review is also the moment a tenant raises everything else. Break options, dilapidations and outstanding repairs tend to arrive in the same correspondence.