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Monday, 16 September 2013

Rent quarter day looms for retailers

Landlords are preparing to issue their invoices for the September rent quarter day (29th September) and this is often a crunch time for retailers.  However, there have been some tentative signs of recovery on the High Street in terms of overall sales, up 3.6% compared to August 2012, but this was not enough for Dwell which was last major High Street retailer to go into administration. In addition the vacancy rate of shops in the UK averages around 14%

Quarterly rent may be enshrined in the lease agreement but many landlords are open to negotiation and are often willing to accept monthly rental payments with little or no penalties.  They are most likely to have the right to ask for interest on the overdue rent as per the lease but this might make the difference between the business surviving or not.

It is not just retailers that are affected but anyone whose business depends heavily on their property -   Retailers rents are normally a higher proportion of their overheads than other businesses hence they are more vulnerable.

If as a business you feel that your rent is overstretching you then it may be possible to ask for a rent concession.  This is more common practice in shopping centres where the landlord owns the whole centre and helping one retailer indirectly helps the others.   The last thing a landlord wants is empty shops which will detract from the centre as a whole.  If you do ask for a concession make sure you have up to date accounts and proof of your difficulties.

If you are a retailer or operator with a high rent bill then look critically at stores or premises that are under performing and it may be that you can vacate these premises if you enter into a CVA.  Read our retailer rescue pages for up to date information.

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