In brief: A valuer may not be able to do a
market rent review of licensed premises based on turnover figures,
if none are provided.
What you need to know:
- We have not seen any lease of licensed premises that requires
tenants to provide turnover figures to a landlord, or valuer.
- If no such figures are provided, can the valuer use
reconstructed figures?
- In our view, there are significant dangers in determining a
rent based on turnover, where the valuer does not have the actual
turnover figures.
Background
Many valuers of hotels use a trading profits methodology to
determine the rent for the hotel. You will be aware that this
methodology was held not to contravene the Retail Leases Act 2003
(Vic) in the recent decision of Epping Hotels Pty Ltd v Serene
Hotels Pty Ltd (2015). So, if a valuer is provided with
turnover figures, the valuer can use those figures to determine the
rent for a hotel.
