A Landlord’s Guide to Commercial Property Lettings

Introduction: Commercial Lettings Are Different

Letting a commercial property is not the same as letting a house or flat. Lease terms are longer, negotiations are more technical, and the financial implications A Landlord’s Guide to Commercial Property Lettingsare much higher.

Whether you’re marketing a retail unit, industrial warehouse, or office suite, success depends on tenant quality, lease structure, and compliance clarity. Done well, a commercial letting secures stable income and enhances long-term asset value. Done poorly, it risks arrears, disputes, or prolonged voids.

At Ravi Seth, we guide landlords through the full commercial letting lifecycle, ensuring every stage — from advertising to lease signature — maximises protection and profitability.

Step 1: Preparing the Property for the Market

First impressions matter, especially in the commercial market where businesses compare competing spaces.

Key preparation steps:

• Compliance check-up: EPC (Energy Performance Certificate), fire safety systems, , electrical testing (EICR), and accessibility. Non-compliance can prevent letting entirely.

• Presentation: Clean, repair, and, if needed, refurbish to modern standards. An outdated office with poor lighting will attract fewer enquiries.

• Clear documentation: Title deeds, planning permissions, service charge history, and floor plans should be ready before marketing begins.

• Market rent assessment: Benchmark against local comparables to set a realistic yet competitive figure.

💡 Tip: Think about tenant needs. Fast broadband, parking availability, or loading access can be decisive factors in securing interest.

Step 2: Marketing the Property

Unlike residential listings, commercial marketing requires a more targeted approach.

Effective marketing includes:

• Professional photography & plans: Floor areas, ceiling heights, loading bays, and parking all need to be showcased.

• Digital platforms: Online portals, Social Media and targeted LinkedIn campaigns.

• Local networks: Agents, business networks, BID groups, and chambers of commerce.

• Signage: Visible “To Let” boards remain effective for local footfall.

• Messaging: Emphasise benefits relevant to occupiers — “prime footfall location,” “excellent transport links,” or “EPC B rating.”

  
  

Step 3: Tenant Vetting and Due Diligence

Tenant selection is the most critical step. A poor covenant can undermine the entire investment.

Checks should include:

• Financial strength: Company accounts, credit ratings (Experian/Equifax), and directors’ guarantees.

• Business viability: Is the business model sustainable? For start-ups, review business plans and require rent deposits or guarantors.

• References: Speak to former landlords or managing agents where possible.

• Covenant strength assessment: National chains bring stability; independents may need stronger security (e.g. deposits or surety).

  
  

📊 Case in point: A landlord accepted a retail tenant without checking accounts. Within 9 months, arrears reached £35,000. A proper covenant check would have flagged weak finances before signing.

Step 4: Structuring the Lease

A commercial lease is more than a rent figure — it’s a legally binding framework that governs responsibilities, risks, and income stability.

Core elements include:

• Rent & rent reviews: Market rent reviews every 3–5 years, or index-linked uplifts.

• Term length: Shorter leases (3–5 years) appeal to start-ups; longer leases (10–15 years) suit stable tenants.

• Break clauses: Flexibility for either party, but carefully drafted to protect landlord interests.

• Repairing obligations: Often “FRI” (full repairing and insuring), shifting maintenance responsibilities to the tenant.

• Service charges: For multi-let buildings, covering common area maintenance, insurance, and utilities.

• Use clause: Restricts how the property can be used (important for retail parades or mixed-use assets).

• Alienation provisions: Control over subletting or lease assignment.

💡 Tip: Always have leases drafted or reviewed by a solicitor experienced in commercial property. Small drafting errors can lead to costly disputes.

Step 5: Heads of Terms (HOTs) & Negotiation

Before a lease is signed, parties agree Heads of Terms — a non-binding document setting out the key deal points.

• Rent, term, reviews, deposits, and responsibilities are documented here.

• Clear HOTs avoid surprises later and streamline legal drafting.

• Negotiations often centre on rent-free incentives, fit-out contributions, or service charge caps.

  
  

Professional agents like Ravi Seth balance landlord interests with market competitiveness, ensuring a fair yet profitable deal.

Step 6: Lease Completion and Tenant Handover

With terms agreed, solicitors draft the lease. On completion:

• Rent deposits or guarantor agreements are secured.

• The tenant signs and pays the first quarter’s rent in advance.

• Keys and access details are handed over.

  
  

From this point, the lease governs the relationship. Smooth onboarding sets the tone for a positive tenancy.

Step 7: Ongoing Relationship and Asset Management

Letting is just the start. Landlords should maintain professional contact and proactive management:

• Regular inspections ensure compliance with repair obligations.

• Rent reviews and break notices must be diarised well in advance.

• Open dialogue with tenants builds trust and improves renewal chances.

  
  

Landlord Tips: Avoiding Common Pitfalls

• Don’t chase the highest rent: Covenant strength matters more than short-term income.

• Don’t ignore break clauses: Poorly drafted breaks can cost years of income.

• Don’t skip compliance: EPC failures or missing fire documentation can invalidate leases.

• Don’t self-manage if unprepared: Commercial management is complex — professional support pays for itself.

  
  

Case Study: Letting a Vacant Retail Unit

A landlord struggled to let a high street shop for 14 months. Approaching Ravi Seth, we:

• Repositioned marketing to focus on local independents instead of national chains.

• Advised minor refurbishments (LED lighting + fresh signage).

• Secured a covenant-checked independent retailer on a 10-year lease with upward-only reviews.

• Achieved rental stability and reduced landlord holding costs significantly.

Conclusion: Lettings Done Right Build Long-Term Value

Commercial lettings are a foundation of property investment. The difference between a profitable, low-risk lease and a costly dispute often comes down to preparation, vetting, and lease structuring.

At Ravi Seth, we combine market expertise with RICS standards to help landlords secure reliable tenants, watertight leases, and sustainable rental income.

Looking to let your commercial property with confidence? Contact Ravi Seth today for expert tenant sourcing, lease negotiation, and long-term asset protection.