Rising rents threaten Western Australia commercial tenants

WA small businesses face growing financial risk from rising commercial rents and tightening vacancies, prompting a wave of caution from DFG Legal to review leases before signing, renewal, or disputes. Forecasts indicate Perth office rents could rise by over 5% annually in coming years, with retail and industrial sectors under similar pressure, exacerbating operating costs for tenants. The firm notes tenants frequently discover lease terms after disputes have started, especially around rent reviews, make-good costs, restrictive assignment or subletting, and personal guarantees. Key clauses to scrutinize include above-market rent review provisions, potentially expensive end-of-lease make-goods, and outgoings that can erode margins. Early legal advice is recommended to prevent disputes and costly litigation, enabling tenants to exit or renegotiate leases with protections they previously overlooked. The story is consistent across multiple outlets recounting the same warning from DFG Legal, underscoring the need for proactive lease review in the WA market.