Turnover Rent Calculator
Work out total rent under a turnover lease, the sales level at which the top-up begins, and the effective percentage of turnover paid.
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Turnover leases pay a base rent plus a percentage of sales above a threshold, so the landlord shares in a successful store and carries some of the risk in a poor one. They are standard in shopping centres and increasingly common on high streets.
The threshold is normally set so the base rent equals the percentage applied to it, meaning the top-up begins exactly where the base rent stops covering the percentage. Understanding that point is what tells a retailer when the lease starts costing more.
The calculation
Total rent is the higher of the base rent and the turnover percentage applied to sales, capped if the lease provides one. The threshold where the top-up begins is the base rent divided by the turnover rate — below it the base rent applies, above it the percentage does.
Worked example
A base rent of 40,000 with an 8% turnover rate means the top-up begins at 500,000 of sales. On a turnover of 900,000, 8% is 72,000, which exceeds the base, so the rent is 72,000 — a 32,000 top-up and an effective 8% of turnover.
Define turnover carefully in the lease
Whether online orders collected in store, returns, staff discounts, gift cards and sales tax count is worth negotiating precisely. In an omnichannel business the definition of turnover can move the rent by more than the percentage rate does.
Turn a calculation into an enquiry
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Create your free property pageFrequently asked questions
Why would a retailer accept turnover rent?
Because it lowers the fixed cost and shares downside risk with the landlord. In an uncertain location or a new format, a lower base plus a share of success can be far safer than a high fixed rent.
Why would a landlord accept it?
To share in growth, to let space that would otherwise stand empty, and because turnover data gives visibility of tenant health. Against that, uncertain income is valued at a higher yield, so it can reduce the building capital value.
How is turnover verified?
Leases normally require certified annual statements and give the landlord audit rights. Disputes usually turn on what counts as turnover rather than on the numbers, which is why the definition matters more than the audit clause.
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