REALWorld Law

Commercial leases

Length of leases

What is the usual length of each type of commercial lease?



There is no minimum or maximum term for a commercial lease. The duration of the lease term can be for any number of years or up to a fixed date.

Generally, a commercial office lease for a larger tenant will be for eight to ten years with one or two option terms (exercisable by the tenant) of three to five years each. In most Australian jurisdictions leases for a period which exceed three years must be registered on a public register with the relevant government authorities for the lease to be legally effective. The main benefit of registering the lease on a public register is to provide third parties with notice of the tenant's leasehold interest in the property.

However, retail leases (relating mainly to leasing of shop space in shopping centres) are governed by specific legislation and, in most jurisdictions, retail leases have a minimum term (inclusive of options for renewal included in the lease) of five years, unless the tenant agrees to waive that right.