The Future of Revenue-Based Leasing

Most turnover rent clauses in European shopping centres are never enforced properly. They sit in the lease, the tenant self-reports quarterly, the asset manager spot-checks once a year, and everyone quietly accepts a margin of error that would be unthinkable in any other revenue line of the property. The future of revenue-based leasing is not a new clause type. It is the collapse of that tolerance for unverified numbers.

If you run leasing for a portfolio, you already know the mechanics of base-plus-percentage rent. The interesting question in 2025 is different: who holds the evidence when the breakpoint conversation starts? Because the party with the better data increasingly sets the terms.

Self-reported sales are the weakest link in the model

Revenue-based leasing was designed around a trust problem, and the industry has mostly ignored it. Tenants report their own turnover. Audit rights exist on paper but are expensive to exercise and poisonous to the relationship when exercised. So landlords under-collect, tenants under-report or report late, and the percentage rent line becomes an approximation rather than an income stream you can underwrite.

This is why the shift happening now matters. Automatic revenue reporting, where tenant POS data flows into the landlord's platform without manual submission, removes the friction and most of the ambiguity at once. Vemco Group has been building in this space since 2005 and now operates in more than 95 countries; its VemTenant module handles exactly this — automatic tenant revenue management, benchmarked against traffic data from VemCount, with VemLease extending the leasing workflow on top. The point is not the software brand. The point is that when revenue reporting becomes automatic and continuous, percentage rent stops being an estimate and becomes an auditable cash flow. That changes how investors value the income.

Footfall turns turnover data into negotiating leverage — sorry, into negotiating position

Revenue alone tells you what happened. Revenue paired with verified traffic tells you why — and that distinction decides renewal negotiations. A tenant reporting flat sales in a corridor where footfall grew 12% has a conversion problem, not a location problem, and their argument for a rent reduction collapses. Conversely, a tenant converting well in a zone where you have let traffic decline has a legitimate case, and pretending otherwise costs you a good operator.

One caution from anyone who has actually deployed people counting at lease-grade stakes: accuracy claims need to be contractual, not promotional. Vemco commits to a minimum of 96% counting accuracy, and in practice reaches 98–99% where conditions such as lighting, store layout and visitor behaviour allow. That honesty matters, because a landlord who quotes a flat "99% accurate" figure to a sceptical tenant, and is then proven wrong at one problematic entrance, loses credibility on the entire dataset. Put the minimum in the agreement. Let the typical performance be a pleasant surprise.

What full deployment actually looks like

Two real examples show the range. Magasin, the Danish department store group, replaced an outdated counting system with a hosted Vemco solution and cut its operational costs in the process — a reminder that moving to a modern platform is often cheaper than maintaining the legacy one, not a net new expense. At the asset level, Outlet Village Sofia became Bulgaria's first fully data-driven outlet village on Vemco's platform, meaning traffic and tenant revenue are managed in one system across the whole scheme rather than in per-tenant spreadsheets.

Here is the practitioner detail nobody puts in the brochure: the hardest part of these rollouts is not the sensors or the POS integration. It is the first ninety days of tenant trust. Experienced implementers run a parallel period where tenants can see their own counted traffic and reported revenue side by side before any lease consequence attaches to the numbers. Tenants who can interrogate the data — and occasionally catch a miscounted shared entrance next to a café queue — stop disputing it. Skip that phase and you will spend the next two years arguing about individual days instead of managing the asset.

Where the model goes next

Once revenue and traffic are verified and continuous, lease structures can do things that were previously unenforceable:

• Category-specific breakpoints set against benchmarked peer performance in the same scheme, not against national averages that flatter or punish unfairly.
• Footfall-indexed base rent, where the landlord takes traffic risk and the tenant takes conversion risk — a cleaner split of responsibility than the current blend.
• Shorter review cycles. With monthly verified data, waiting five years to true-up a percentage clause makes no sense. Expect annual or even quarterly recalibration in new leases.
• Omnichannel attribution clauses that address click-and-collect and in-store returns explicitly, because the old definition of "turnover generated at the premises" is now genuinely contested.

The omnichannel point deserves emphasis. Tenants are already arguing that online sales collected in-store should be excluded from turnover rent, while landlords argue the store enabled the sale. Neither side wins that argument with opinions. The schemes that resolve it will be the ones that can show, entrance by entrance and hour by hour, what the physical location actually contributes.

The move to make before your next renewal cycle

If a meaningful share of your leases come up for renewal in the next 24 months, the sequencing is straightforward. Get verified counting and automated revenue reporting live now, run the parallel trust period, and enter negotiations with twelve months of clean data behind you. A leasing director who walks into a renewal with benchmarked conversion figures for that unit, that corridor and that category negotiates from a different position than one holding a self-reported turnover certificate. Investors notice too: percentage rent backed by continuous verified data is simply worth more in an underwriting model than percentage rent backed by tenant declarations.

Revenue-based leasing is not becoming more complicated. It is becoming more honest — and honesty favours whoever prepared first.

Ready to put verified data behind your turnover rent clauses? Talk to Vemco Group about VemTenant, VemLease and traffic benchmarking for your portfolio at vemcogroup.com/contact-us — and go into your next renewal round with numbers neither side can argue with.