Most people assume a retail property adviser finds shops. That is perhaps a fifth of the work, and usually the least valuable fifth. Here is what the job actually consists of, and the circumstances in which you should not bother instructing anyone.

Before the search: defining the requirement

The first work is establishing what you actually need, which is frequently not what the brief says. Is this a flagship, a showroom or a trading store? What must it achieve, and how will you judge it in three years?

A brand that has not settled this internally will not resolve it by viewing units. A significant part of early advisory work is asking uncomfortable questions until the requirement is genuinely defined, because every subsequent decision depends on it.

The search, including the part that is invisible

Searching available stock is straightforward and largely automatable. The value is in the rest: identifying units that are occupied but might become available, understanding which landlords are receptive to your category, and knowing which pitches are strengthening or thinning.

For F&B this stage also involves eliminating sites that cannot physically work. Extraction routes, drainage, planning use and licensing position rule out a large proportion of apparently suitable units, and establishing that early saves months.

Negotiation

Heads of terms determine most of the value in a lease, and they are agreed in days. Rent, term, break options, rent-free period, capital contribution, repairing obligations, assignment provisions, reinstatement, rent review basis: all are negotiable at this point and all become expensive to change afterwards.

The specific skill is knowing what is actually available in the current market, which comes from doing deals continuously rather than occasionally. A landlord’s opening position is an opening position. Knowing how far it typically moves is the whole job.

The part that lasts ten years

After completion the adviser’s work shifts to the lease lifecycle, and this is where the money is.

• Rent reviews, where a well-evidenced case can hold a rent flat that would otherwise rise
• Lease renewals, which in the current market can settle below the passing rent
• Regears, restructuring a lease mid-term to suit both parties
• Surrenders and assignments when a site is not working
• Portfolio management once you have several sites, staggering expiries and coordinating review evidence

A rent review settled flat rather than ten per cent up on a £200,000 rent is worth £100,000 over the review period. That single piece of work can exceed the value of the original acquisition advice several times over.

When you genuinely do not need an adviser

There are situations where instructing anyone is a waste of money, and it is worth saying so plainly.

• You want a specific unit in a well-supplied market with several comparable options openly available
• The unit is small, the rent is modest and the lease is short, so the value at stake does not justify a fee
• You have in-house property expertise, which many established retailers do
• You are taking space in a managed scheme with standard terms and little genuine negotiation available
• You have already agreed terms directly and simply need the documentation, in which case you need a solicitor, not an agent

Where it does justify itself

The situations where advice pays for itself are narrower and identifiable: where the unit you want is not on the market, where the value at stake over a lease term is substantial, where you are entering a market you do not know, where the physical or planning position is complex, and at review or renewal where a small percentage movement compounds across years.

How to judge whether it worked

Ask what was achieved against the landlord’s opening position, in cash, across the term. Rent, rent-free, contribution, break rights. If your adviser cannot express their contribution in those terms, that is informative.

And apply the same test at the outset. An adviser who tells you that your situation does not require them is demonstrating exactly the judgement you would be paying for.

Further reading: Why I Act Only for Occupiers · Buying Prime London Through a Family Office · About Aldo Attanasio d’Aponte

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Aldo Attanasio d’Aponte is the founder and chief executive of Arbitrage Group, a boutique buyer-side advisory specialising in prime central London real estate. This article is general commentary and not financial, legal, planning or tax advice.