Retail Rent

Landlords facing 75% fall in retail rent

A report from The Times has suggested that one of Britain’s biggest landlords is preparing for rental payments from retailers to fall by as much as 75% in the next year as tenants default on their dues, due to the coronavirus pandemic.

Land Securities has a national portfolio of shopping centres, offices and leisure complexes. Its share price has almost halved as a result of the coronavirus outbreak but it is still worth more than £4 billion and in the FTSE 100.

The pandemic shutdown has led to more than 30% of the company’s tenants failing to pay rent within ten days of the due date for the current quarter, compared with 6% at the same time last year. It expects rent collection rates at the next quarter payday in June to be even lower, “given that most of the negative economic impact from Covid-19 has fallen in the second quarter”.

The British Property Federation, a lobby group, has urged the government to call out “can pay won’t pay” retailers, who they say have taken advantage of a three-month moratorium on evictions and temporary ban on landlords using statutory demands to secure rent.

Land Securities reported an annual pre-tax loss of £837 million as it wrote down the value of its property by £1.18 billion to £12.8 billion. The 8.8 per cent decline in the adjusted value of its portfolio was attributed to a fall in the value of its retail and leisure assets, with about a third of this linked to the pandemic.

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Debt Squared Comment

Government have introduced temporary new measures during the coronavirus pandemic. Statutory Demands and Winding-up Petitions issued to commercial tenants are temporarily voided. You can instruct Debt Squared if are owed 90 days or more of unpaid rent.

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Exclusive to Debt Squared our SCAR services remain in-place for pre-legal debt recovery instructions.

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