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Real Estate Business Glossary

A

Arcade

A covered way or gallery for pedestrians, usually flanked by shops on one or both sides. Historically the roof was arched.
 
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Assign 

To transfer an interest in a property, especially a lease. 

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B

Break Clause

A clause in a lease (or other contract) which gives the landlord and/or the tenant (or one of the parƟes to the contract) a right, in specified circumstances, to terminate the lease (or contract) before its normal expiry date. It usually defines the length of noƟce to be given and may (or may not) be subject to contractual or statutory financial provisions. Statutory provisions may affect contractual enforcement.
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Business Tenancy

A tenancy of premises used for a ‘business’ by an occupier who enjoys security of tenure under Part II of the Landlord and Tenant Act 1954.
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C

Catchment Area

  1. The area of land from which water finds its way into a particular watercourse, lake or reservoir.  

  2. By analogy, the area which contains those people who can be expected to obtain goods, services, employment or other benefits from a particular property. More especially related to retail premises, where the success of forecasting depends on the accuracy of estimating the number of purchasers (catchment population) likely to be attracted from the different parts of the area and the average expenditure which might be expected from them.
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Chain Store

One of a series of retail outlets under a single ownership, but now more commonly called a multiple retail outlet. Each store with such a group will probably sell the same range of goods and have the advantage of central buying. 
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Clear Title

Unencumbered title to real property, against which there are no claims, mortgages, 
voluntary liens, etc. 





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Completion

The final stage in the legal process of transferring ownership of property, eg where the documents in connection with the sale of land are signed, sealed and delivered
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Contract

A legally binding agreement. Two situations concern the disposal of land, namely: 
1. before September 1989 – a contact for the disposal of an interest in land is unenforceable in the absence of a sufficient memorandum in writing (see section 40 of the Law of Property Act 1925) or a sufficient act of part performance by one or other of the parties: and, 
2. from September 1989 – the Law of Property(Miscellaneous Provisions) Act 1989 provides that the contract must be made in writing and state all the terms agreed on by the parties. 

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Convenience Goods

Goods normally purchased without making any comparison with alternatives, other than 
by price, including food and drink, tobacco, matches, newspapers, cleaning materials.
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Convenience Shop/Store

A retail outlet selling convenience goods. In the case of the larger outlets a limited range 
of comparison goods may also be included.
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Convenience Shopping

The process of buying one or more articles, not necessarily confined to convenience 
goods, either under one roof or from a number of units in close proximity to each 
other, providing for consumers’ specific regular shopping needs.
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Covenant

1. Strictly, an obligation undertaken by a party and effected by deed, eg in a lease, obligations of the landlord or tenant.  
2. A subjective assessment of the character and quality of a tenant in terms of being able 
and willing to comply with the terms and conditions of the lease. In valuations the 
quality of the covenant will normally influence the yield adopted. A tenant of sound standing is often referred to as a ‘good covenant’. 
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D

Department Store

A, usually, multi‐level retail property varying in size from one selling an extensive, but not 
comprehensive, variety of goods to one selling a full range of different lines. A distinctive 
feature of a department store is that it stocks a significant amount of clothing and 
household goods. 

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District Shopping Centre

A group of shops typically anchored by at least one supermarket. It is often supplementary to a main town shopping centre and usually has an emphasis on the sale of convenience 
goods, but also offers a limited range of comparison goods.
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Due Diligence

For any business, those steps taken, eg by prospective buyers or their professional 
advisers, to ensure operations are lawful and in accord with proper professional practice, 
including taking positive action rather than none.
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F

Factory Outlet

An individual retail outlet or one attached to a factory where goods may be sold. Depending on the circumstances, the prices will be either at a level not exceeding the manufacturer’s recommended minimum or at a special lower level. 

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Fast‐food Shop

 Retail premises for the sale, often under franchise, of light, fast‐cooked food for eating 
on the premises or taking away.
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Floor Area

 The aggregate superficial area of an individual floor or of a building, taking each floor into 
account. The RICS Code of Measuring Practice distinguishes the following categories and 
should be consulted for full details: 
1. gross external area (GEA) (formerly referred to as ‘reduced covered area’ or ‘gross floor 
space’. 
2. gross internal area (GIA); and,
3. net internal area (NIA).
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Footfall

The number of pedestrians passing through a building or area, eg a shopping centre.
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Franchise

A business in which a franchisor licenses a franchisee to undertake certain business 
activities, usually under the trade or business name of the franchisor. The franchisor may 
provide: 
a. Initial services, which may include selection of site and premises, fittings, staff training and sales promotion; and 
b. Running services such as bulk purchase of stock. The franchisee undertakes to pay a capital sum or royalties or both.
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Freehold

In general parlance this is used as a shorthand for the tenure of an estate in fee simple 
absolute in possession. Strictly speaking, however, freehold includes fee simple, 
entailed interests (formerly ‘fee tail’) and tenancies for life. 


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G

Gross Lettable Area

A term sometimes used in relation to managed shopping schemes to correspond 
broadly with the definition of gross internal area in the RICS Code of Measuring Practice. 

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H

Halving Back

A method of applying a unit of rent to the zones of the area of a shop for rental valuation purposes, usually confined to the ground floor area. The principle is that the most valuable area of a traditional shop is to be found at the front, ie the display area, and that the value then declines with increasing depth. The shop is divided into zones, usually of equal depth, with the value of the first, ie the front zone, being €x per annum per sq ft or m2. Each successive zone is then ‘halved‐back’ in value, ie €x/2, €x/4, and so on, but where the depth is considerable a larger rear zone (‘remainder zone’) may be valued at a flat rate per sq  or m2 without further halving back. If there is a rear or return frontage with direct access and possibly with window displays giving the prospect of additional custom, the value in relation to zoning will be modified.
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Head of Terms

Fundamental points of an agreement intended to form the basis of a formal contract. In a 
letting these usually include duration of the lease, the initial rent and obligations and 
rights of the respective pares, such as rights of assignment, subletting, maintenance, 
insurance and use.
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I

Internal Repairing Lease

 A lease under which all or some internal (but no external) repairs are the responsibility of 
the tenant. The extent to which external repairs are the responsibility of the landlord 
depends upon the wording of the lease.
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K

Kiosk

A small enclosed retail outlet, normally without toilet facilities and occupying less than 
15 m2 of retail floor space, frequently located on a public concourse or other place where it may remain open only during peak mes and be closed securely when there are no 
customers. Kiosks are now sometimes included in managed shopping schemes. 

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L

Lease

 1. The grant, subject to consideration, of a right to the exclusive possession of land (or of 
the asset) for a definite period (or one capable of definition) which is less than that held by 
the grantor. (A lease of more than seven years must now be registered with the Land 
Registry, previously it was for more than 21 years (see the Land Registration Act 2002).) 
2. The right so granted, ie the leasehold estate.  
3. The document granting the right. In practice, the term ‘Lease’ is usually reserved 
for a lease under seal (a statutory requirement for a term of more than three years from the date of the grant).
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License

1. The lawful grant of a right of something which would otherwise be illegal or wrongful. 
It may be gratuitous, contractual or coupled with an interest in land. The grantor of a 
licence is the licensor and the grantee is the licensee. A licence does not of itself transfer 
any interest in the land but may authorise the licensee to enter the licensor’s land for some specific purpose, eg market trading. It differs from a tenancy in that the licensee does not have paramount control of the land and may only enter thereupon for the purposes of the licence; the licensor may enter the land and use it in any way not inconsistent with the rights of the licensee. However, a landlord may authorise by licence some act or omission by a tenant which would otherwise be a breach of the terms of the lease.  
2. Some act or omission by a tenant which has been authorised by the landlord but would 
otherwise have been a breach of the terms of the lease.

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M

Mezzanine

 In a building of several storeys, an intermediate floor extending to a lesser area than the main floors. A structure within a single storey warehouse providing addional floor area, of lesser area than the main building. 

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Multiple Retail Outlet

 A retail outlet operated by an organisation with 10 or more branches.
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O

Outlet Centre

Generally an out of town centre featuring high quality brand manufacturing and vertically 
integrated retailers selling their excess stock, overruns, last season’s stock and quality 
seconds, direct to the public at discounts of around 30% to 50% of the recommended 
retail price, in well presented and actively managed environments.
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P

Passing rent

 The rent which is currently payable under the terms of a lease or tenancy agreement.
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Prelet

Colloquial term for a legally enforceable agreement for a letting to take effect at a future date, often upon completion of the development that is proposed or under construction at the time of the agreement.
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R

Retail Warehouse

A retail store selling non‐food goods occupying a warehouse. 

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Reverse Premium (Negative Premium)

1.  A payment by the holder of a superior interest to a lessee in consideration of 
some benefit, eg an improvement in the terms of the lease from the landlord’s point 
of view.  
2.  Commonly, a payment by the owner of a leasehold interest to an assignee in 
consideration for relieving him of the liability.
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S

Service Charge

The amount payable by a tenant on account of services provided by his landlord.
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Shopping Centre

 A central location where shops are grouped together to serve a local or wider population. 
Centres are classified in hierarchies order by function and/or size, and by the area served.
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Specification

A document which lists and describes all items of construction in a building or engineering 
project in sufficient detail to ensure that a contractor has enough information to enable 
the project to be carried out. The specification describes the materials, form of construction intended and the standard required in accordance with such plans and drawings as are provided.
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T

Tenancy

1. Strictly speaking, the interest of a person holding property by any right or title, eg a joint 
tenant (which has nothing to do with landlord and tenant, per se).  
2. More usually, an arrangement, whether by formal lease or informal agreement, whereby 
the owner (the landlord) allows another (the tenant) to take exclusive possession of land in 
consideration for rent, with or without a premium, either:a. for an agreed period; or b . 
on a periodic basis until formally terminated. 
3. Under the Landlord and Tenant Act 1954, section 69(1), this ‘means a tenancy created 
either immediately or derivatively out of the freehold, whether by a lease or underlease, by 
an agreement for a lease or underlease or by a tenancy agreement or in pursuance of any 
enactment (including the Act), but does not include a mortgage term or any interest 
arising in favour of a mortgage by his attorning tenant to his mortgagee…’. 

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Tenancy Agreement

A lease for three years or less, not under seal.
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Tenant’s Repairing Lease

 A lease where the lessee is under an obligation to maintain and repair the whole, or 
substantially the whole, of the premises comprised in the lease. This meaning is also 
adopted for the purpose of Schedule A income taxation.
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U

Upward‐only Rent Review

A rent review where the rent payable following a review date is the greater of the rent payable immediately before the review or the amount calculated upon review under the 
terms of the lease.
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V

Vacant Possession

The attribute of an empty property which can legally be exclusively occupied and used by the owner or, on a sale or letting, by the new owner or tenant. 
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Z

Zone A Value

 
In the zoning method, the unit of comparison for rental purposes attributed to the frontal 
zone of retail premises, eg €x per square metre.
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Zoning Method (Zoning Approach)

A method of analysing the rental value of retail space (usually on the ground floor) by dividing it into strips parallel with the main frontage.
 
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