‘After unprecedented times, we need some fresh ideas about retail property’

For example, the temporary let, which morphed into the pop-up during the noughties, is now being rebranded as ‘meanwhile use’. Essentially the same principle, except with a name that suggests a prelude to something more permanent, which in the current climate may be a tad over-optimistic.

I’ve never regarded this practice, whatever its current euphemistic description, as being a solution to the problems of empty high streets. The difficulties with retail property are not temporary in nature and pretending they are doesn’t help shape a long-term solution.

My problem right now with the ‘meanwhile’ concept is that it’s nothing new. While this time there’s some relatively paltry government financial support, it’s still a warmed-over scheme in its third incarnation.

“Reports of retailers and landlords preparing to square up as the moratorium comes to an end gave me a depressing sense of déjà vu”

Surely, after the unprecedented times we’ve all just lived through, we need some fresh ideas.

I hoped that after a forced reset of the commercial property market, we’d be looking at a new approach from all sides. I even thought, perhaps naively,  that the government might finally make good on its annual promise to reform business rates.

But reports of retailers and landlords preparing to square up as the moratorium on legal action comes to an end this month gave me a depressing sense of déjà vu.

The UK commercial property model has been badly broken for years now.

Problems such as unrealistic rent, rates and lease terms predate Covid by at least two decades.  The pandemic, along with the rise of alternative channels and a sea-change in consumer behaviour, has just brought about a long-overdue reality check. 

If that wasn’t enough, nearly £3bn in rental liability should focus minds on finding a way to fix this for good. Instead, we seem to be seeing the same brinkmanship approach coming from landlords, government and some retailers.

Granted, there’s been some fancy footwork from certain quarters during this period and a few companies haven’t let a good crisis go to waste. But as store closures, CVAs, pre-pack administrations and the like are all being mooted again as a way for tenants to get out from under this mountainous liability, landlords seem equally set on groundhog day approaches towards recovering their lost rent.

The proposals from companies such as Landsec and British Land would give some breathing space, but landlords are still seemingly keen to skew things in their favour, using court orders to lock in long-term liabilities. 

This seems to ignore the realities of the situation for retailers, many of whom will have had no income for months and are understandably unenthusiastic about being further hamstrung by debt for years to come. 

The government has remained fairly aloof throughout this process, when it should step up to ring-fence losses to avoid a potential meltdown. Ideally, it should underwrite a full write-off in line with the chancellor’s promise that he would do “whatever it takes”.

But, as an industry, we shouldn’t ignore the responsibility we have to reshape retail to make it sustainable in the emerging, post-pandemic consumer landscape.

“We have an opportunity to rebuild retail in a way that allows all stakeholders to leave behind the confrontational baggage of the old ways”

New concepts have arisen, providing the impetus for a reimagined industry incorporating physical and virtual space, novel income streams and shared risk and reward models.

As Churchill is credited with saying, “Those that fail to learn from history are doomed to repeat it.”

We have an opportunity to rebuild retail in a way that allows all stakeholders to leave behind the confrontational baggage of the old ways and create new co-operative leasing models and innovative approaches to engage profitably with each other. 

Let’s not waste the chance we’ve been given by reverting to old ways and repeating the mistakes that led us to the brink before Covid and could easily push us over the edge now.