This recent report focussed on retail property trends and identified that shopping centre incomes were protected to some extent by automatic fixed rental escalations of around 4%. “The problem is that if rent is going up by four per cent a year but turnover is growing by less than that, occupancy costs rise,” says a BIS Shrapnel spokesperson. “Specialty shop occupancy costs are at an all-time high. They are unsustainably high for some tenants.”Those costs are leading occupants to either not renew at the end of the lease or demand a cut in rent to stay. If they leave, the incoming tenant is achieving a more attractive offer, in a combination of lower rent and/or leasing incentives. “There’s widespread evidence of slowing centre income growth as a result”.