It has been a week of decidedly mixed fortunes for the retail and hospitality sectors.
On the one hand, the prime minister confirmed that social distancing will be reduced from two metres to ‘one metre plus’ and that restaurants, cafés and bars will be allowed to reopen on 4 July – cue loads of Independence Day memes (personal favourite: image of Charlie holding the golden ticket conveying how difficult it is likely to be to reserve a slot at a boozer next week).
On the other, we had the dreaded quarter rent day, on which Revo chief executive Vivienne King warned that retail landlords were likely to receive as little as 15% of the rent due (and that might be optimistic – Property Week has learned of one commercial landlord that claims to have received just 5% of what’s due across its UK estate).
Coming little more than a week after non-essential stores started to reopen (and more than a week before hospitality reopens), June quarter day threatens to trample any green shoots of recovery before they have a chance to break through. It is little wonder that calls are mounting for urgent action to be taken to resolve the increasingly rancourous standoff between landlords and their tenants over rents.
King argues that government intervention is crucial if the retail sector is to bounce back. As the dire forecasts for June quarter day show, nowhere is that intervention more crucial than in relation to rents.
Boxpark founder Roger Wade made this very point when I video interviewed him last week about his fears that the retail and hospitality sectors face Armageddon if urgent action is not taken. But, as he warns in ‘View from the top’ this week (watch the video here), the new code of conduct is not enough. A more robust framework set by government but thrashed out in collaboration with landlords and tenants, with the interests of all three parties in mind, is needed – and quickly.
The stark reality is that almost all the government support to date has been directed towards retailers and tenants. Landlords have been left out in the cold – and some could be about to pay the ultimate price. Whether action is taken to resolve the rent standoff or not, it may be too little too late for beleaguered shopping centre landlord intu, which having been hanged and drawn has now been quartered. Its fate was due to be revealed today (26 June) after a week of rescue talks with creditors.
As Property Week went to press, most industry commentators were expecting at best a stay of execution. After what will surely prove to be the worst quarter day on record, others may not fare much better.
On a more upbeat note, having broken some brilliant stories online in the past few days, Property Week is delighted to present this week’s lockdown-defying, 56-page issue.
Highlights include: the final part of our ‘What happens next?’ series, in which leading industry lights share their reforecasts for a post-lockdown future; two fascinating proptech features on facial recognition and scope for tokenisation in real estate; and a market report on whether office occupiers are set to move to a hub-and-spoke model in the wake of Covid-19.