What Is a Rent Review?

A rent review is the mechanism in a commercial lease by which the rent is reassessed — typically every three to five years. For retail properties, the new rent is almost always determined by reference to the open market rental value at the review date, and the ITZA method is the standard tool surveyors use to establish that value.

As a tenant, understanding how ITZA works in the context of a rent review gives you the ability to scrutinise your landlord's proposal, identify errors, and negotiate from an informed position.

How ITZA Is Used in Rent Reviews

When a rent review is triggered, the landlord (or their surveyor) will typically propose a new rent based on ITZA analysis. The process involves:

1. Measuring the property — The shop is measured to Net Internal Area (NIA) standards and divided into zones from the frontage
2. Calculating the ITZA — Each zone's area is divided by its division factor and the results are summed
3. Applying a Zone A rate — A rate per square foot is applied based on comparable evidence from recent lettings in the area
4. Making adjustments — Percentage adjustments are applied for property-specific factors such as shape, frontage, or position
5. Proposing the rent — The total (ITZA × Zone A rate ± adjustments) becomes the proposed new rent

What Tenants Should Check

Receiving a rent review proposal can be daunting, but the ITZA method is transparent — every element can be verified. Here's what to focus on:

1. The Measurements

Are the floor areas correct? Measurements should be to NIA standards as set out in the RICS Code of Measuring Practice. Common errors include:

• Including structural columns or service ducts in the measured area
• Measuring to the wrong side of internal walls
• Using outdated measurements that don't reflect alterations
• Incorrect zone depths (should be 6.1m / 20ft from the frontage)

2. The Zone A Rate

The Zone A rate should be supported by genuine comparable evidence — actual rents recently agreed for similar properties in the same area. Question the comparables:

• How recent are they? Evidence more than two years old may not reflect current market conditions
• Are the comparables genuinely similar in size, configuration, and pitch?
• Have lease incentives (rent-free periods, capital contributions) been properly stripped out?
• Are there any comparables that support a lower rate that have been omitted?

3. The Adjustments

If your property has characteristics that reduce its value relative to a "standard" unit — irregular shape, narrow frontage, excessive depth, poor access — appropriate adjustments should be applied. Equally, check that any positive adjustments (e.g. for a corner position with dual frontage) are justified.

4. Ancillary Areas

Upper floors, basements, and mezzanines should be valued at appropriate division factors. If the landlord's surveyor has valued your basement at 1/5th of Zone A but it's only accessible via a narrow staircase and has low headroom, a factor of 1/15th or 1/20th might be more appropriate.

Common Mistakes in Rent Review Valuations

Cherry-picking comparables

The landlord's surveyor may present only the highest comparable evidence. A fair analysis considers all available evidence, including lettings at lower rents.

Ignoring lease incentives

Many lettings include rent-free periods or tenant fit-out contributions. If these aren't stripped out, the headline rent overstates the true rental value. A 12-month rent-free on a 10-year lease effectively reduces the rent by 10%.

Outdated measurements

If your property has been altered since it was last measured — a partition removed, a mezzanine added, or a rear extension built — the measurements may not reflect the current configuration.

Inappropriate Zone A rate

Applying a prime pitch Zone A rate to a secondary or tertiary location, or using evidence from a different class of property (e.g. a large department store to value a small boutique).

Negotiating the Review

You don't have to accept the landlord's proposed rent. The typical process is:

1. Receive the trigger notice — The landlord serves notice proposing a new rent
2. Do your own analysis — Measure the property, gather your own comparable evidence, and calculate your own ITZA valuation
3. Respond with a counter-proposal — Present your analysis and proposed rent, highlighting any errors or disagreements in the landlord's valuation
4. Negotiate — Surveyors for both sides exchange evidence and arguments to reach agreement
5. Third-party determination — If agreement can't be reached, the lease typically provides for determination by an independent expert or arbitrator

Instructing a RICS-qualified surveyor to act on your behalf is advisable for significant rent reviews. The cost of professional advice is usually far less than the potential saving on rent over the review period.

Upward-Only Rent Reviews

Most existing commercial leases contain upward-only rent review clauses, meaning the rent can only stay the same or increase at review — it can never decrease, even if the market has fallen. This makes it even more important to challenge any overvaluation, because once a higher rent is agreed, you cannot reduce it until the lease expires.

Note that the UK government announced plans in 2025 to ban upward-only rent review clauses in new commercial leases in England and Wales, though this does not affect existing leases.

Run Your Own Valuation

Use our free ITZA Calculator to run your own rent review valuation. Enter your floor areas, apply the Zone A rate from your comparable evidence, add any adjustments, and generate a PDF report to support your negotiations.