Property panic

The fate of the high street is rightly getting a lot of attention at the moment, and Mary Portas is now starting to get round the retailers as her review gathers pace. One issue which is sure to come up is property costs - quite rightly because the total cost of occupying space (ie rent, rates and utlities) has soared far more rapidly than sales have grown.

People I speak to in the property world are increasingly worried about this. To the outside world, concepts such as upward only rent reviews, quarterly in advance rent payments and 10 or 15 year leases seem like an anachronism. It would be an easy win for Portas to suggest curbs on these longstanding ways of doing things, and one which would go down well with retailers large and small.

It would be harsh on the big property owners, which have made great strides in being more flexible and responsive to their tenants, although there remains more to be done. The problem is that a lot of high street property these days is owned by highly leveraged private investors who are banking on long, secure income streams for their pensions and have no incentive to move into the modern age.

It’s going to be a few months yet before Portas issues her review, and I have no inside track. But I suspect this will be one of the areas she will go big on, and that the proeprty fraternity may already be planning its response.