Starting your first shop, café, or retail business is an exciting milestone, but the process can be lengthy and complex. For many small business owners, it may be the first time dealing with property agents, solicitors, lease agreements, funding and fit-out contractors.
The good news? With the right preparation and expectations, you can avoid costly mistakes and set yourself up for success. In this guide, we’ll walk you through the 6 stages of renting commercial property in London, from property search through to launch day.
Stage 1: Property Search and Shortlisting (4-12 weeks)
Narrow down your target areas to around five target locations.
Visit each location in person and make note of the agents with a ‘To Let’ board up, ‘closing down’ signs in windows, or struggling businesses. Remember you don’t have to wait for a property to hit the market to secure it.
Do online searches to see what’s available and refine your shortlist to three or four serious options. Organise viewings and take photos of the condition. Then run the numbers and compare options.
For top tips read our blog post on How to find a retail space for your business and The Complete Guide to Finding a Shop to Rent in London for Small Business Owners
Stage 2: Making an Offer and Lease Negotiations (2-4 weeks)
The next stage is to make an offer on suitable properties. Expect some back-and-forth negotiations with the agent.
A good approach is to offer on all properties which could work for you. Usually, you can’t obtain the landlord’s best position until you have gone back-and-forth several times. And in order to decide on the best property to go for you need to know the final costs / lease terms.
Read What to include in your offer and How to get your offer accepted for some expert snippets.
Stage 3: Heads of Terms (2 weeks)
When you reach an agreement, the landlord’s agent should send you a set of Heads of Terms. This is a two-page document which covers more details about some of the lease terms. For example, it will include things like who’s responsible for repair and maintenance; is the rent to be paid quarterly or monthly in advance, what are the conditions attached to the break clause etc.
Typically, you’ll find the following in the heads of terms:
- Property address and contact details for the landlord, tenant and both solicitors
- Lease length and security of tenure i.e. whether the lease is renewable
- Repair and insurance responsibilities
- Rent amount, payment frequency and schedule (usually monthly/quarterly, in advance)
- Conditions of break clauses and rent reviews
- Handover condition and timing
The heads of terms stage is usually the last opportunity for you to make changes. Head over to our Tenant Toolkit for guidance along with a downloadable set of heads of terms containing advice and recommendations to assist your negotiations.
Stage 4: Legals (8-16 weeks)
Both your solicitor and the landlord’s solicitor will turn the Heads of Terms into a 50-to-60-page lease. The landlord’s solicitor will draft all required legal documents and send them through to your solicitor to review and amend. These usually include:
- A lease agreement (50–60 pages)
- A rent deposit deed (if you are putting down a deposit)
- A licence to alter (if you plan to make alterations to the property)
Your solicitor will request Commercial Property Standard Enquiries (CPSEs) which are a standard set of questions used to provide tenants with vital information about the property’s physical condition, environmental issues, and any legal disputes. CPSEs allow you to conduct due diligence and make informed decisions before committing to lease the property.
They will also ask which searches you wish to carry out. Again, commercial property searches are due diligence checks to uncover hidden risks and restrictions on a property before committing to a lease. These typically include Local Authority Searches for planning issues, Environmental Searches for land contamination and flood risk, Drainage and Water Searches for utility connections, and Title Searches for legal ownership and third-party interests. The purpose of these searches is to ensure the property’s suitability for your business and to prevent costly surprises after the lease is signed.
Tip: Searches can be costly and some won’t be relevant. Ring your solicitor and ask which ones they’d recommend.
Stage 5: Preparing During the Legal Process (within the 8-16 weeks as above)
It’s so important to use this time wisely. As soon as the lease is in agreed form there will be pressure on you to sign it. Once signed you will be given the keys and the rent will be due.
You therefore want to get the property refurbished for your use as quickly as possible. So ideally you want to be handing the keys straight on to the contractors to start refurbishing the property.
Typically, landlords will agree to 3 months’ rent free so if you are efficient about fitting out the premises, you could be open and trading before owing any rent.
Things you should be doing:
- Cost your fit-out and get at least three quotes and book in your preferred option
- Organise a building survey to check the condition. You don’t want to be responsible for repairing issues that you inherited from the previous tenant.
- choose equipment (e.g EPOS system, wifi) suppliers and book them in
- Time to finalise your funding options if you need it
Recommendations: Read about the government start up loan here and How to finance you fit out if you need funding.
Stage 6: Handover, Setup, Marketing and Recruitment (2-8 weeks)
On the day you get the keys:
- Hand over to your contractors to start works immediately.
- Set up your business rates account with the local authority and ask about empty rates relief (sometimes up to three months is available).
- Secure fixed-rate tariffs for utilities and arrange Wi-Fi.
- Apply vinyl to your shopfront announcing ‘Opening Soon’ with a QR code linking to your website or Instagram.
- If you’re hiring staff, advertise roles in the window. Locals walking past are a great pool of candidates.
- Plan your local marketing campaign and opening day offers to create buzz.
See our startup checklist in our dashboard.
How Long Does It Take?
From property search to opening day, expect the process to take at least 6 months. Anything faster is rare, so manage expectations carefully.
Rushing risks poor property choices or being forced to make concessions when negotiating lease terms.
Tip: Have a look at our timeline for visual representation.
Final Thoughts
Opening a shop or restaurant in London is a marathon, not a sprint.
By approaching each step methodically from property search through to marketing launch, you’ll avoid common pitfalls and set your new business up for a strong start.
