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The nuances of leasing a commercial space for the hospitality sector

property leasing for hospitality sector

The hospitality sector comprises of a variety of service-based businesses including restaurants, theme parks, spas and lodging facilities such as hotels, motels and resorts. Each of these business formats has their own unique real estate requirements. If you are planning to commence a new business in the hospitality sector or are already a part of the leisure industry and want to relocate your business, you’ve come to the right place.

While the search for ideal hospitality real estate can be exciting with so many different choices, finding the right leased property can be stressful. Here are 4 basic aspects to keep in mind while leasing a property for the hospitality sector


Finding the right location is key to the success of any business, especially when it comes to hospitality real estate. What meets the requirements as a good location depends a lot on the type of business you own. The requirements of a restaurant will be different from that of a luxury resort or an amusement park. Most small hospitality concepts today require high pedestrian activity to thrive. While it is true that you may have to pay more for a location in or close to high traffic generators such as a mall or a shopping center, a lower lease location in a remote area is often a recipe for failure.

When evaluating locations for your hospitality business, do your homework. Consider the impact of the local population density, demographics and traffic counts in the area. Find out about upcoming projects, new real estate ventures, public works projects, new roads and other developments currently in the planning stages.

Initial lease term and future renew options

While leasing a property for the hospitality or leisure sector, you have two options. It may be beneficial to have a long initial term to regenerate your startup capital investment and guarantee continued occupancy. Alternatively, you can negotiate a shorter initial lease period and then add to that several renewal options.

Business uniqueness

Greater the potential competition faced by your business, poorer the viability of the location. If you plan to lease a property in a mall or singly owned commercial complex, you can negotiate with the landlord to create a provision in the lease agreement to restrict all other competing businesses in the same premises.

Ample parking space

For a business in the hospitality sector to prosper, sufficient parking must be available. No matter how great your food or customer service is, if a patron cannot park their car and visit your establishment, then all your efforts are a waste. Make sure your lease obligates the landlord to maintain ample parking next to your restaurant for your customers.

These key aspects determine the success of a hospitality business. From luxury hotels to restaurants serving different cuisines, Citadel has long-standing successful partnerships with numerous hospitality sector players. We help our clients find a profitable location that has the ideal positioning, ease of day-to-day operations, security and can therefore provide the best guest experience.


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