Retailers are calling for centre owners to be more flexible in the way that retail space is leased and priced, according to the Occupier Satisfaction Index 2009, sponsored by Property Industry Alliance & CoreNet Global UK.

Looking for inspiration? Did you know that there is a clothing store just off Carnaby Street where the price you pay depends on the outside air temperature? If it’s a heat wave you could get a massive 30 per cent discount or more!

I have just read that Hermes Real Estate owned developer, Argent, is pricing office space according to the change in Gross Domestic Product of the UK economy. They reckon it’s only fair that when business is tough, you should pay less rent than when the economy is growing. As GDP increases, so will your rent.

Are these gimmicks or innovative ways to encourage business? I ask this question at a time when the pricing and terms of retail space has never been so lacking in transparency. With all sorts of deals being done to safeguard the headline rent, who knows what the real rental value of retail space is. Occupiers perceive this “artful dodging” to be simply designed to reinforce the outmoded rent review system. Surely we need to create a far more transparent market in the pricing of retail space. This would really help new retailers make sense of the oversupplied marketplace.

So Landlords; it’s time to engage with retailers, get creative and explore some innovative ways to price retail space, increase transparency and share risk and reward.

Howard Morgan is the managing director of RealService, the real estate customer service specialist.

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