A comparison of upward‐only and turnover leases

The upward‐only lease is the dominant rental contract in the UK, while the turnover lease is widely used in the US retail sector. This paper compares and contracts the landlord rent options in these two leases, interpreting and extending the earlier simulation analysis of Booth and Walsh and of Hendershott and Ward. While the options are similar, the ability of the turnover rent lease to induce greater landlord effort and co‐operation between tenants and the landlord suggest that both UK investors and UK consumers would be well served by greater use of the turnover lease.