Retail Real Estate: Navigating the Legal Landscape Behind the Shopfront

August 2025

Multiple factors including inflation, and digital disruption have reshaped UK retail. Forward-thinking occupiers are adapting with new leasing models and experiential stores. As the market evolves, legal considerations around leases, compliance, and strategy are critical for businesses entering or expanding in this fast-evolving retail landscape. Here's what businesses need to know when considering entrance or expansion in this quickly evolving market.

OWNER-OCCUPIER RELATIONSHIPS

Owners are less hardline than previously in negotiating commercial terms with occupiers and are far more open to discussions and flexible arrangements. A collaborative, partnership approach is the norm, with property owners much more willing to establish a deal that works for both sides.

A RISE IN TURNOVER-BASED LEASE

One of the ways this partnership style of working manifests itself is through a rise in turnover-based leases which are replacing traditional long-term, fixed-rent models in UK retail, especially in shopping centres. Seen as fairer and more flexible, they align landlord and tenant interests. Retailers benefit during uncertain times, while landlords are incentivised to support occupiers’ success to boost rental income.

BAN ON UPWARDS ONLY RENT REVIEWS

The recent English Devolution and Community Empowerment Bull unexpectedly included the ban on upwards only rent reviews which may lead to more rents being linked to RPI/CPI. The Bill is currently working its way through parliament and is subject to review and potential change. If it does become law, this isn’t expected until 2026 at the earliest. While the reform aims to support occupiers, the provision in the Bill will face strong resistance from owners — particularly funds and institutional investors who rely on predictable income streams.

EXPERIENCE-DRIVEN RETAIL

Leading UK retailers now prioritise experience over pure sales, since this can easily take place online from the comfort of consumers’ own homes, by repurposing units into concept stores and service-driven spaces. Examples like Harrods’ ‘H Beauty’ and Nike’s interactive offerings show the shift. Having a sharp focus on the legal ramifications of such changes of use can make the journey of repurposing much faster, simpler and smoother.

THE LANDLORD AND TENANT ACT 1954

The Landlord and Tenant Act 1954 is a significant bit of legislation which is highly relevant to retailers. It was created over 70 years ago to provide security of tenure to occupiers. Whilst most occupiers automatically have the right to renew under the Act, it is showing its age: the world and commercial leasehold market have both changed significantly in that time.

Most concern reflect that parts of the Act stand in the way of modern commercial practices, causing cost and delay and preventing commercial space from being occupied quickly and efficiently. To address these concerns, the UK Law Commission is undertaking a consultation on the Act to assess its suitability for today’s commercial leasehold market.

DELAYS TO LEASES AND HM LAND REGISTRY

Many of our global retailer clients have remarked that in the UK, processes like negotiating leases, dealings with HM Land Registry and even the court system can be convoluted and frustratingly slow.

Tools like the Model Commercial Lease have helped speed things up, yet without good legal advice, commercial leases that should take between four-six weeks can often drag on for months. This is not helped by HM Land Registry, with registration currently taking between 12-18 months.

In recent years, we’ve been pleased to help international retailers such as Peter Alexander, Smiggle and Optical Center with their programme of UK entry or expansion – acting and advising on lease acquisitions, renewals and portfolio management.

#DavittJonesBould #CommercialLease #RealEstate #Retail

---

ABOUT DAVITT JONES BOULD:

Davitt Jones Bould is a national law firm that specialises entirely in real estate. The firm has offices in London, Manchester, and Birmingham ensuring truly national coverage.

The firm is renowned for its high quality legal work and service.

We only recruit experienced lawyers with excellent calibre. As a result, our legal team of around 70 lawyers have an average post-qualification experience that exceeds 25 years. Most have joined us from other City firms, in-house departments and/or senior roles. Our lawyers have advised some of the UK’s most significant land owners including Barclays Bank, HSBC, Credit Suisse, Rolls Royce, The Royal Parks, The Cabinet Office and The Crown Estate. This focus on quality only has led to a 50% male and female Partner rate. 

All of our clients are provided with a dedicated client care professional at no extra charge, which ensures that they receive the highest standard of service at all times.  

Davitt Jones Bould is regularly selected to advise on high profile projects such as the hosting of the London 2012 Olympic Games by The Royal Parks and the first Sukuk Bond to be entered into by a Western Government on behalf of HM Treasury. Based in London at The Shard and also Manchester, Birmingham and Taunton, we have a national presence.

The firm enjoys top tier rankings in all of the main directories, as well as receiving many awards.