This rent review clause represents a significant safeguard for the landlord as it enables them to adjust the rent to reflect current market conditions. Many leases are granted for considerable periods of time and without a rent review clause, the rent payable could fall significantly behind levels prevailing in the market at any particular point in time. And, of course, inflation erodes value over time.
Even more significant than the existence of the clause itself is the fact that these clauses provide for 'upwards – only' reviews. Should general market rents be lower, the tenant will not benefit as the rent will be unchanged – not reduced.
This is one of many reasons why, for many years, commercial property has been such an attractive prospect for investors. With a financially sound tenant in occupation, there is clear visibility of income for years ahead with no risk of reduction until the lease comes to the end of its term, or is ended by virtue of the exercise of a 'break clause'.
 Related articles on Designing Buildings Wiki
Featured articles and news
What will the General Data Protection Regulations (GDPR) mean for you when they come into force in May?
Business Secretary chairs a new taskforce to monitor and advise on mitigating the impacts of Carillion’s liquidation.
Sir John Armitt is appointed the new chair of the National Infrastructure Commission.
High quality and high density homes - is it what we need or is it storing up trouble?
Government announces its intention to strengthen planning rules to protect music venues and neighbours.
National Audit Office reports that there is little evidence that PFI offers better value than other forms of contracting.
What is liquidation and how does it apply to contractors in the construction industry?
Scrutiny is placed on Carillion's controversial 2013 decision to extend subcontractor payment terms to 120 days.
RSHP unveil their involvement in a boundary crossing which will provide a new entry point into Hong Kong.
With PFI currently under the spotlight due to Carillion, this introductory article explains what they are.
Estimates suggest that up to 30,000 small firms could be at risk of non-payment as a result of Carillion's collapse.