8. Leasing and Rental Contracts

§ There are a number of ways to tailor rental deals with commercial malls. Typically, these are a straight rental based on the m² used for the shop. Alternatively, some malls will work on a turnover rental; however, this generally means that the mall will take your money on your behalf and give you a cheque at the end of each month. The turnover rent option is gradually fading out as malls have become exposed to VAT payments on sales turnover.

§ Other fees that are generally charged include a management fee and a promotional fee. The management fee is used towards general upkeep of the property, as well as security and other services. The promotional fee is a cumulative fund used for centre promotion activities. You should ask to view the promotional plan in the event that you are charged this fee.

8.a Fit Out

§ Fit out contractors: once you have chosen the site for your project, choose a contractor who is licensed or recognised by the fire bureau. Your plans will need approval before fit out work can commence. A contractor with good relations with the building management is also a plus.

§ The installation of major services, such as gas, water, electrical works, etc. is usually the responsibility of the landlord, who will deliver the services to an agreed point (generally the meter in the case of utilities). However, make sure you tie this point down in the contract.

§ Following some high profile accidents in recent years, fire and safety are both very important, and at the contract negotiation stage, you should carefully review who is providing what safety equipment.

8.b Air Systems

§ For air conditioning, check the times of operation, and make provisions for these times in your leasing contract.

§ Check if the centre is operating on a two or four pipe system, as well as the nature of the heating source, i.e. directly from the boiler or, as in many cases, from the public hot water supply.