Economics and shared success

Aligning Commercial Terms with Trading

H-TEM replaces fixed base rent for participating commercial venues with a share of trading revenue. The operator and development participate in the same commercial outcome, subject to the agreement for each project.

Commercial structure

A different relationship to trading

Fixed rent is payable regardless of sales. A revenue share rises and falls with turnover. The consequences depend on the terms agreed and the operator's full cost base.

Monthly charge

Fixed rent6,000
Revenue participation5,000
Turnover × participation rate

Illustrative calculation only. Both charges exclude utilities, service charges, tax, financing, capital costs and other obligations. A lower charge does not establish profitability.

The allocation of a transaction

Trading revenue has distinct destinations

The participation agreement defines how eligible trading revenue is divided. A conservation contribution can be specified separately; the operator's remaining revenue is not yet profit.

Eligible trading revenue

Project participation

The agreed share replacing the participating venue's fixed base rent.

Legacy contribution

A separately defined allocation to an eligible conservation or cultural recipient.

Operator revenue

The remainder before payroll, supplies, utilities, tax and other obligations.

The contribution base, rate, recipient and collection must be specified in the relevant agreements. The three flows are conceptual; their shares are not shown to scale.

The Equilibrium Architecture / CarbonCarbon Sets the Pace of Development

A phase can have enough demand and still be too early to build. H-TEM tests whether it fits the lifecycle emissions budget and whether clean power, cooling and transport can serve the added load when it arrives.

Explore carbon and development
The commercial architecture

Align the economics with the activity

H-TEM connects the developer's return to the performance of participating operators. Its economic design also has to account for the cost and governance of the services that make those operators viable.

01

Replace the fixed base

Revenue participation changes how demand risk is shared.

A fixed base rent remains payable when sales fall; a turnover-based charge varies with trading. In the zero-base-rent version of H-TEM, the participating venue pays an agreed share of eligible revenue instead of a fixed base rent. The operator still carries payroll, supplies, working capital and other operating costs.

The definition of revenue, treatment of taxes and refunds, reporting, payment timing, audit rights and any additional charges belong in the agreement. Revenue participation is not a guarantee of operator profit.

02

Make the service trade-off visible

A lower rent can be undermined by expensive essential services.

Shared power, water, connectivity, maintenance and logistics can reduce duplication and support reliable operations. They also create dependency where an operator has limited practical alternatives. The complete comparison must therefore include all recurring charges, service quality and the risks borne by each party.

The architecture proposes transparent tariffs, external benchmarking, service standards, independent oversight and remedies. These protections need to be specified and enforceable in each project; scale savings are not automatic.

03

Follow the revenue

One transaction can support several distinct obligations.

A portion of eligible trading revenue can be allocated to the precinct under the participation agreement, while a separately defined contribution can support conservation or cultural programmes. The remaining amount stays in the operator's accounts before its own costs, tax and financing.

The contribution base, beneficiaries, collection, ring-fencing and audit must be specified. Do not add a contribution twice or treat funds committed to an independent legacy institution as distributable project profit.

04

Test the entire operating outcome

Compare like with like across the trading cycle.

A useful comparison holds sales and comparable costs constant, then varies rent, participation, service charges and other contractual obligations. Test a low month as well as a strong month, and consider upfront capital, seasonal demand and the operator's ability to absorb a loss.

The resulting difference in charges is not net profit, an investment return or proof that either arrangement is superior in every circumstance.

Model a scenario