Leases – is there a pot of gold hiding in plain sight? Opinion: Simon Morris

Landlords make their money through leases, so it’s natural that the best are constantly reviewing their portfolio to see how they can maximise capital value and returns through active asset management.

While the primary purpose of the business differs for occupiers, leases should be actively asset-managed in a similar way to derive financial value from the portfolio, as well as protect against downside. A lack of internal resources and cost pressure can necessitate a reactive approach, with business as usual taking priority.

GCW has created £5m+ in savings for a single occupier.

Working alongside an in-house team, we undertake a full portfolio analysis reflecting store performance:

• Store location review – a SWOT analysis looking at things that affect each location, such as how customers are using the town, the relocation of complementary occupiers, changes in pitch and so on.
• Benchmarking rent – passing rent vs the market
• Lease audit – identifying lease events, clauses onerous to the landlord or tenant, to be removed or used as leverage.
• Landlord analysis – knowing the negotiating strength of landlords, and whether their focus is on income, covenant, use, or a combination – is something we can use to our advantage. Similarly, our learned understanding of their behaviour, and how they react, allows us to present something that appeals to them.

Employing this process allows the protection of the best-performing sites, builds flexibility or exits from those loss-making or marginal locations, in addition to reducing occupational costs and securing capital for deployment across the business.

Employing this across the estate is essential, as it exposes where the risk is greatest, particularly the loss of the highest contributing sites, and the opportunity to apply leverage to secure these.

In today’s competitive environment, leases are far more than operational necessities – they are strategic instruments for unlocking value. Those who take a proactive approach to portfolio management can safeguard high-performing stores, exit underperforming sites, and redeploy capital where it delivers the greatest impact. Hidden opportunities exist within every estate. Now is the time to challenge convention, reassess your portfolio, and turn your leases into a source of lasting competitive advantage.