Landlords seek partnership with retail tenants

Last week our biggest members signed a joint statement offering extra support to retailers.

This wasn’t empty rhetoric, but a pledge by Europe’s biggest landlords and pension funds to go the extra mile to support customers.

Our agenda is partnership: working with tenants and discussing how we can support them. Property plays a big part in retail but funding the types of development that attract customers depends upon long-term financing structures.

The BRC’s response criticised the fact only 12% of retailers were on monthly rents. Regardless of this figure being drawn from just 14 retailers, the fact is this is not as big an issue as some would have the world believe.

Hammerson, for example, only had two requests this quarter day. Other leading landlords have reported similarly small numbers of requests.

The BRC said that landlords needed to back up their words with action and that’s precisely what’s happened. All the leading landlords are offering monthly terms on new leases and for those occupiers in distress, and our 10-point plan to cut service charges proved how a constructive two-way dialogue could deliver savings.

Some major landlords have also remodelled their retail leases, conscious of the challenges to both our sectors that lie ahead: making them simpler, more transparent and embedding the spirit of partnership into the lease itself.

Turnover rents, for example, could play a big part in shaping the mutually beneficial lease structures of the future. Understanding customers’ sales and how their business links to what’s happening in the retail centre could be very useful.

While no one can blame retailers for negotiating hard for the benefit of their owners, landlords must also answer to shareholders and financiers.

Our members have sought to strike the right balance: support for those that need it, while protecting the interests of our sector’s shareholders and pension savers by continuing with the terms of leases that were freely entered into, where the occupier does not need help.

Ultimately we all have investors to answer to and working together has to be the answer.

Liz Peace is chief executive of the British Property Federation