A group of property heads and retailers including Sir Philip Green, Phil Wrigley executive chairman of New Look and Francis Salway, chief executive of Land Securities, has reached an agreement on a number of controversial measures including monthly rents and service charges.
The measures, as revealed in Property Week today, are not as wide reaching as many retailers had hoped but are a step towards a more collaborative approach between landlords and retailers.
The measures agreed on are:
Retailers with three shops or less and paying an annual rent of £50,000 or less can pay rent monthly in advance instead of quarterly provided they commit to pay their rent by direct debit.
A joint initiative between retailers and property owners is underway to manage service charge costs. A pilot for this initiative is underway targeting up to a 20% reduction in service charges with landlords sharing costs.
The pilot involves: Land Securities at White Rose, Leeds; Prupim’s and Capital Shopping Centres at Cribbs Causeway in Bristol; British Land at Meadowhall in Sheffield and Westfield at Merryhill, in the west Midlands.
Rates on Empty Properties
The group is working together to continue to lobby government to reverse the rates on empty property.
Measures on insurance, rent reviews and the structure of leases, are still being reviewed.
The landlords who are part of the group who have agreed the measures are: Aviva Investors, British Land, Capital & Regional, Liberty International, Land Securities, Legal & General, Prupim and Westfield.
Liz Peace, chief executive, of the British Property Federation, said: "The BPF has always urged its members to engage directly and constructively with their customers, particularly those are experiencing difficulties brought about by challenging economic conditions. The media report issued today by a group of property and retail organisations is a good example of the sort of dialogue we recommend.
"The particular measures it describes have, however, come out of private discussions between two groups of landlords and tenants and are not necessarily appropriate for – and indeed clearly cannot bind – the industry as whole.
"We shall, nevertheless, be monitoring closely the outcome of the particular initiatives announced, and, where appropriate, will look at whether and how the wider industry may learn from, and take action on, them.
"In particular, we would support the philosophy that landlords should treat expenditure on rechargeable services as carefully as their own. We shall be writing to our members to disseminate that message.
"We made clear following the last Owners’ and Occupiers’ Forum that we would encourage landlords to be open to discussing the possibility of monthly rent payment terms, although we recognised that this would need to take account of the financial impact for both sides.
"The BPF is appreciative of its relationship with the retail sector and our joint campaigning with the British Retail Consortium on a range of issues, such as both sectors' vehement opposition to the withdrawal of empty property rates relief.
"Through the Owners’ and Occupiers’ Forum and our bilateral relationship with the BRC, we will continue to work together to ensure that both sectors can best weather the extremely testing economic conditions they face at present."