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Rent as a percentage of sales: how percentage rent works in a mall

Percentage rent is easy to agree and hard to run. The maths is one line; the work is getting a sales figure out of every tenant, every month, and knowing who has not sent one.

Percentage rent — rent as a share of a tenant’s turnover — is the normal shape of a retail lease in a mall, and increasingly common in food courts, kiosks and pop-up units. It ties what the landlord earns to how the centre actually performs, and it gives a tenant room to breathe in a slow month.

The three shapes you will meet

The natural breakpoint is simply the base rent divided by the rate — the sales level at which the percentage would produce exactly the base. A base of 1,200 JOD at 12% gives a natural breakpoint of 10,000 JOD a month. Some leases set an artificial breakpoint higher or lower; if yours does, write the number in the lease rather than leaving it to be derived.

What the lease has to settle

• What counts as sales. Gross turnover, net of VAT? Are staff discounts, returns, gift cards, delivery-platform orders and inter-branch transfers in or out? Delivery apps are the common argument today — decide in writing.
• The reporting deadline. A date, not "monthly": for example by the 5th for the previous month.
• The evidence. A POS or Z-report, a signed sales certificate, and an audit right — with a stated remedy if an audit finds under-reporting.
• What happens if nothing is reported. Most leases fall back to an estimate or to the minimum rent, plus the right to audit. Without this clause you have no number to invoice.
• When rent is paid. Reporting and paying are two different dates; say both.

The part that actually costs you money

Very few landlords lose money on the arithmetic. They lose it on collection: nobody knows, on the 6th, which fifteen of forty shops have not sent a figure. The sales numbers arrive as WhatsApp photos, the rent is invoiced late, and by the time anyone reconciles the quarter, the evidence is scattered.

Whatever system you use, it needs to answer three questions on any given day:

1. Which tenants owe a sales figure for the last period?
2. For those who reported, what is owed, and was it paid on time?
3. What was the reported figure, and who entered it — a year from now, in an audit?

How Maawa FM does it

In Maawa FM, rent lives on the tenant, not on a global setting. Each tenant is either on a fixed amount or on a percentage of sales:

• Fixed — an amount with its own frequency (monthly, quarterly, semi-annual or yearly), paid in advance or in arrears, with its own due day. A neighbour can be on completely different terms.
• Percentage of sales — a rate instead of an amount. When your team records the payment, they enter the sales the tenant reported for that period; the amount due is computed from the rate and stored with the payment, together with the sales figure it came from.
• Utilities — electricity, water, gas or AC can be fixed, metered (entered each period), or simply left out when they are included in the rent or in the percentage.

A percentage tenant who has not reported yet is not treated as owing zero: they appear as awaiting a sales report, counted separately from the money that is actually due, so the outstanding-rent figure on the dashboard never quietly under-states the month. Everything else reads the same way as fixed rent: paid, paid late, covered by a longer payment, due, or not due yet.

A short checklist before you sign

• Rate, breakpoint (natural or artificial) and minimum, all written as numbers
• Definition of gross sales, with delivery platforms named explicitly
• Reporting date, payment date, and the fallback if nothing is reported
• Audit right, notice period, and who pays for the audit if it finds a gap
• Where the reported figures will be recorded, and who can see them

Written by the Maawa team · Last updated 2026-09-12 · Questions: [email protected]