You lease time, not space

For every Community Pharmacy owner operating from leased premises, there is one contract that can have an extraordinary influence on profitability, business value, succession planning and ultimately the price that may one day be achieved for the Pharmacy itself: The lease.

That is why the release of the Pharmacy Guild of Australia’s 2026 Pharmacy Rental Report should be regarded as far more than the annual publication of another set of rental statistics.

It is an important business management tool and, in my view, one of the most valuable resources available to Guild members with a lease.

I have had the privilege of contributing to and co-authoring the Guild’s annual Rental Report for a number of years. Lease1.au has specialised in Pharmacy leasing for 30 years this November, and throughout that time our relationship with the Pharmacy Guild — including as its longest-serving endorsed Retailer leasing partner through Gold Cross — has given us a unique perspective on the enormous impact that good, and poor, lease management can have on a Pharmacy business.

The starting point is simple: Know your numbers.

The Rental Report provides Pharmacy owners with valuable benchmarks around rental and occupancy costs. Those benchmarks help an owner understand how their own lease compares with the broader Community Pharmacy sector and provide an evidence base when reviewing rent, preparing for a market rent review, negotiating a renewal or considering a new location.

But the real value of the Report goes well beyond a benchmark percentage.

Understanding what sits behind the rent

The Rental Report also provides important definitions, explanations and practical advice to help Pharmacy owners better understand the commercial principles and leasing issues sitting behind those numbers.

A rent figure in isolation tells only part of the story.

Total occupancy cost, annual rent reviews, outgoings, incentives, lease term, options, market rent provisions, make-good obligations, relocation rights, refurbishment requirements, permitted use, assignment provisions and security requirements can all materially affect the true cost — and ultimately the value — of a lease.

And that brings me to perhaps the most important leasing principle I can share after 30 years in Retailer leasing: You lease time, not space.

Yes, your lease gives you the right to occupy a particular shop.

But commercially, what you are really securing is a defined period of time in which your Pharmacy has the contractual right to operate from that location.

Every day that passes is one day less remaining on that contractual right.

That means your lease should never be something you negotiate, sign and put in the bottom drawer until the option date approaches.

It is a business asset that needs to be actively managed throughout its entire life.

Make your lease an asset, not an anchor

For Community Pharmacy, tenure can be particularly important.

A strong location, established customer relationships, turnover, profitability and goodwill may all underpin the value of a Pharmacy. But when that Pharmacy is eventually sold, a purchaser — and often the purchaser’s financier — will also look very closely at the lease.

• How much secure tenure remains?
• What options are available?
• What rent reviews apply?
• Is the rental sustainable?
• Can the lease be assigned?
• Are there relocation, redevelopment or other provisions creating future uncertainty?
• Does the remaining lease term support the price being paid for the Pharmacy business?

These questions can directly influence the saleability and underlying asset value of the Pharmacy.

Put simply: Your lease needs to be an asset — not an anchor.

This is where managing a lease throughout its entire term, and strategically planning future lease terms, can create some of the greatest financial opportunities for a Pharmacy owner.

Too often, lease negotiations begin only when a Landlord issues a renewal proposal, an option deadline approaches or a significant rental increase arrives.

By then, negotiating leverage may already have been lost.

The better approach is to manage the lease strategically from day one.

Know the critical dates. Monitor occupancy cost. Understand the rent review mechanisms. Review outgoings. Maintain appropriate rental evidence. Assess the remaining lease term against your business and succession plans.

And importantly, ask: Where does my Pharmacy need to be in three, five or ten years — not simply where is it today?

Small changes can create substantial value

When lease management is undertaken properly, significant savings can be achieved over the life of a lease.

A relatively small improvement in rent, annual rental increases, outgoings or other occupancy costs, when compounded across a long lease term, can represent a very substantial saving.

But the opportunity is greater than rental savings alone.

Negotiating the right option structure, protecting important lease rights and securing sufficient tenure at the appropriate point in the Pharmacy owner's business cycle can add considerable underlying value because it supports the future saleability and financeability of the Pharmacy.

That is why the Guild Rental Report is such a powerful resource.

Community Pharmacy represents one of the largest, most sophisticated and geographically dispersed essential-service Retailer networks in the Southern Hemisphere.

Very few Retailer sectors have access to the depth of dedicated, sector-specific rental intelligence and leasing guidance that Australian Community Pharmacy enjoys.

In my view, the Pharmacy Guild Rental Report represents world's best practice in industry-specific rental benchmarking.

It combines real industry information with practical leasing guidance that allows Pharmacy owners to make better-informed decisions and, importantly, negotiate from a position of knowledge rather than assumption.

But the Report needs your support

There is, however, an important responsibility that comes with having access to a resource of this quality.

The strength of any benchmark depends upon the strength of the data behind it.

The Guild Digest is the foundation of an enormous amount of Community Pharmacy benchmarking and industry intelligence.

The Guild describes the Digest as its pre-eminent publication examining the operation and financial performance of Australian Community Pharmacies and, importantly, it relies upon Pharmacy owners contributing their financial information each year.

That participation matters.

I would strongly encourage every Community Pharmacy owner to contribute to the Guild Digest each year.

Your individual contribution becomes part of something much bigger — a body of industry knowledge that assists the Guild, strengthens Pharmacy benchmarking and supports the development of resources such as the Rental Report.

The equation is straightforward:

• More Pharmacy participation creates stronger data.
• Stronger data creates better benchmarks.
• Better benchmarks create greater negotiating power.

And ultimately, greater negotiating power can help Pharmacy owners reduce occupancy costs, improve lease outcomes and protect the value of their businesses.

Don't just download it — use it

After 30 years specialising in Retailer leasing, one lesson has remained constant:

The best lease outcomes rarely happen by accident.

They come from preparation, information, benchmarking, timing and a clear negotiation strategy.

So when you receive the 2026 Pharmacy Guild Rental Report, don't simply download it and file it away.

1. Read it.
2. Benchmark your Pharmacy.
3. Understand the definitions.
4. Compare your occupancy costs.
5. Review your lease dates.
6. Understand your future tenure.
7. Consider your succession plan.

Then use the information to start a conversation about what your lease needs to deliver over the years ahead.

Because ultimately, your Pharmacy does not simply occupy a shop.

You Lease Time, Not Space.

Manage that time well and your lease can become one of the most important assets supporting the future value of your Pharmacy — rather than an anchor holding it back.

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