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The End Of One Size Fits All: One Owner’s Solution To How Turnover Leases Should Work

A planning inquiry into redevelopment of Marks & Spencer, Marble Arch, has started.

Turnover leases are a big talking point in commercial property today. They are seen by some as a potential solution to the crisis in retail and leisure property, by others as a system that could erode the value of UK commercial property.

Now one institutional investor has sought to solve the issue of what type of lease is best for tenants by coming up with four different types of lease for retail and leisure occupiers. Legal & General Investment Management has decided to do away with a one-size-fits-all approach to retail and leisure leasing, which it thinks will increase the value of its assets in the sector. It will offer the lease types to existing and future tenants. Online sales made in-store will be attributed to the store’s sales, and L&G will not deduct online sales returned to store from the store turnover.

As trading levels recover from the peak of the coronavirus pandemic, this new flexible partnership model has greater potential for investor income upside and the ability to generate increased and better quality occupier activity through optimised lease commitments, the company said.

“Retail is not only changing through market forces, but also culturally,” LGIM Real Assets Head of Retail & Futuring Denz Ibrahim said. “Our role as owner is shifting from what was solely ‘the librarian’ (collecting rent, renting shops and cleaning spaces), to becoming an ‘editor’ of the space. We need to ensure we have the right content, at the right time, in the right places, to support both occupiers and consumers.”

Here are the four types of lease it is offering, and the who, what and why behind its thinking.


What? White-boxed spaces aimed at startups for three to 36 months, on turnover deals.

Who? Aimed at emerging brands, new concepts and seasonal businesses.

Why? Reduce the initial cost, complexity and commitment length for small businesses whilst providing the most innovative and exciting occupiers for customers.


What? A turnover deal with an owner break linked to performance, with mid-term leases of three to five years.

Who? Aimed at operators L&G wants to work with and remain important partners, but for whom the traditional leasing model no longer fits. 

Why? Collaborative sharing of risk and reward between owner and occupier, driving stronger performance through partnership and offering more involvement from owners to drive audience.


What? A traditional lease on a longer term of five years or more.

Who? For resilient occupiers who are financially solid, guarantee footfall and who prefer the traditional model.

Why? Occupiers remain happy with longer-term commitments and L&G is happy that their offer is resilient and fit for the future.

Flexi Flagship

What? An amalgamation of the turnover flexibility of flexi, but with the lease length of flagship.

Who? Operators L&G wants to partner with but who need longer-term security.

Why? For relevant businesses, particularly in the leisure sector, that L&G wants to partner with but that have higher initial fit-out costs to pay off and/or require longer lead times to engage a local customer base.

Contact Mike Phillips at