Rents-bill day sees major landlord set new precedent
The British Retail Consortium is calling on all commercial landlords to emulate one of the largest by accepting rents monthly in advance.
Following an announcement by pension fund manager Hermes, that it is willing to substitute monthly in advance terms for the traditional quarterly terms, on existing leases, the BRC is stepping up its campaign on the issue.
The retailers’ organisation has long argued that demanding rents quarterly in advance is wrong in principle. It is an anachronism dating back hundreds of years to the days when horseback was the fastest means of communications and has no place in the modern age. But toughening trading conditions have given the issue a new urgency as the extra costs and cash flow difficulties of paying quarterly in advance have become more significant. The BRC’s two year campaign has lead to monthly terms becoming the norm on new and re-signed leases. But Hermes is the first major landlord to agree to renegotiate existing leases.
Quarterly rents are traditionally paid on the four quarter days each year. The next is today (Monday 29 September 2008).
British Retail Consortium Director General Stephen Robertson said: “As many retailers are confronted with next quarter’s huge up-front rents bill, Hermes announcement is a significant step forward for our campaign.
“A number of retailers have gone into administration this year. Others are clearly struggling. Most are battling a range of rising costs in order to keep shop prices and overall inflation down.
“The dam has burst. Hermes’ move shows there is no principled or practical reason why landlords cannot offer this flexibility. I urge all landlords to follow Hermes’ example. By agreeing to a fairer rents regime, landlords will be contributing to the retail prosperity on which they themselves depend.”
