Analyzing Commercial Lease Rent Review Mechanisms in Australia
Analyzing Commercial Lease Rent Review Mechanisms in Australia
What is the typical duration for an initial commercial lease term in the Australian market, and what rent review mechanisms are common?
2 Answers
In Australia, initial commercial lease terms typically range from 3 to 5 years, though longer terms of 7 to 10 years are also common. Rent reviews are usually conducted annually or every 3 to 5 years, often based on CPI adjustments, market rental valuations, or fixed increases agreed in the lease.
In Australia, the typical initial term for a commercial lease is around 3β5 years for small businesses, though longer terms of 7β10 years are common for larger tenants or prime locations. Rent review mechanisms usually include annual or biennial increases tied to CPI (inflation) or market rent reviews, giving both landlord and tenant a way to adjust for changing market conditions. Emotionally, signing a commercial lease can feel like a big commitment, so understanding the term length and how rent will escalate helps you plan cash flow and avoid surprises while settling into your new business space.