Jurisdiction(s):
United Kingdom

Key definition

Turnover rent definition

What does Turnover rent mean? Turnover rent is rent under a commercial lease that varies according to the tenant’s trading performance at the premises, typically calculated as a percentage of turnover and sometimes (less commonly) profits. In practice it is a contractual pricing mechanism rather than a statutory concept, and is not defined by legislation; its meaning and operation depend on the lease wording. Usage is broadly consistent across England and Wales, Scotland, Northern Ireland and Ireland. Key features include: - Structure: a pure turnover rent or a base/minimum guaranteed rent with a turnover top-up (often above a threshold). - Turnover definition: detailed inclusions/exclusions (for example...

A practitioner's guide to turnover rent in UK retail leases: models, base rent mechanics, defining and calculating turnover, audit rights, and online sales attribution

Published by a LexisNexis Property expert

Practice notes

A Turnover rent, sometimes called ‘percentage rent’, is a rental sum that rises or falls with the level of trade achieved at the let premises. Such arrangements are most commonly used by landlords of shopping centres, outlet destinations and comparable multi-occupied retail settings, chiefly because these locations create environments landlords can more readily manage and influence.

Types of turnover rent

There are several variants of turnover rent, and the choice will depend on a range of factors.

The ‘100%’ turnover rent

The tenant’s rent is calculated solely as a percentage of its turnover. Service charge and insurance rent are usually payable on top of the turnover rent. This model is often used as an incentive to encourage a tenant to take vacant space, for example on a ‘pop-up’ or ‘meanwhile’ basis.

The ‘top-up’ turnover rent

The rent is set as the greater of a fixed percentage of turnover or a percentage (invariably 100%) of the open market rent. Service charge and insurance rent may be included within, or charged in addition to, the turnover rent. This type of turnover rent is commonly encountered...

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Web page updated on 21/05/2026

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