Will retailers be paying their rent in September?
Landlords and tenants will be keeping their cards close to their chests when it comes to paying next quarters rent as Covid-19 continues to play havoc in the commercial property and retail sectors.
So far, we have had the March and June quarter rent days. Know one really knows where we might be when the next rent period comes around in September. The retail sector is often a barometer for market confidence so it remains to be seen if landlords will take a different approach to agreeing and collecting rent payments from their tenants on 29 September 2020.
In the 3 months leading to the June quarter day there was none or very little trade and initial figures suggest that landlords only received about 15% of what was owed with many retailers paying nothing at all, leaving shop owners more than £2 billion out of pocket.
This now leaves landlords, in particular those that own shopping centres, in a difficult place and some are warning that they may go into administration having failed to secure agreements with their creditors. The recent news of Intu’s troubles has done nothing ease the pressure and sentiment coming out of the market.
The gamble for retailers and all commercial property tenants will be whether to pay rent on the September quarter day. This is a major test for a market that should be preparing for the run up to the busy Christmas period but will have numerous challenges to consider.
Will there have been a sufficient bounce back since the shop doors opened in June? What might happen with staff who are currently on furlough and will that thwart the recovery? What might happen when the protection for tenants against forfeiture of commercial leases for non-payment of rent ends on the 30 September? And, above all, where will the UK be in its fight against the pandemic with many commentators suggesting a second spike is likely.
All these factors and more will influence whether retailers will risk paying three months’ rent in September in the hope that the run-up to Christmas might be their saviour.
If you need advice on how to legally document a rent concession or what remedies are still available to you as a landlord contact David Ashton e. email@example.com t. 01825 745 366 in Rix & Kay’s dedicated Commercial Property Team based in Brighton & Hove, Uckfield, Sevenoaks and Ashford