Shop landlords must deliver actions not words
Following this year’s first quarter day the British Retail Consortium (BRC) is calling on landlords to deliver on their promises to “go the extra mile to support firms”.
Reacting to what the British Property Federation (BPF) is today (Friday) calling a pledge of support from landlords; the BRC says, while retail tenants welcome landlords’ public commitment to be more flexible on rental terms, a recent BRC survey showed only 12 per cent of retail property leases are on monthly rental terms.
The vast majority of retail tenants are still faced with the archaic practice of quarterly rental payments upfront. And nearly 90 per cent of respondents who had been allowed to move to monthly terms said they had been, or would be, penalised with higher charges. Two-fifths said if they had been allowed to move to monthly rents it was just on a temporary basis – typically a year.
Stephen Robertson, British Retail Consortium Director General, said: “We welcome this public commitment by landlords to be more flexible, but they need to back up their words with action.
“Our objection to quarterly payments has always been a point of principle – not just about helping businesses through tough times. Monthly rents are now more common on new leases, but our figures show many landlords have yet to deliver the flexibility they promise – especially on existing leases.
“Demanding to be paid quarterly in advance has no place in the modern world of online banking. Landlords should offer tenants monthly rental terms, where retailers ask for it.”
Monthly rents are much more common on new leases. The BRC’s Monthly Rents Survey found that since January 2008 two-thirds of new leases have included monthly payment terms. But, despite moves by some, commercial landlords have a long way to go on showing this degree of flexibility on existing leases.
The BRC’s campaign predates the recession. The retailers’ organisation has always said quarterly rental terms are wrong in principle. It is an unjustifiable practice from an era when horseback was the fastest means of communication and has no place in the modern age. But the impact of the downturn has given the campaign a new urgency as the extra costs and cash flow effects of paying rents three months upfront have become more significant.
