Retailers need to help themselves and not fleece their landlords
The call by restaurant chains and others to the government to extend the ban on the collection of rent on commercial properties such as shops and cafes completely ignores the plight of the landlords of these premises, say leading tax and advisory firm Blick Rothenberg.
Head of property at the firm, Heather Powell said: “ The suggestion that Landlords, again, should be required to provide financial support restaurants and cafes, as well as retail outlets, that have been open since June, is scandalous.
“ Landlords do provide one of the critical resources for UK PLC to operate from – but they don’t have the responsibility – or financial resources – to support this sector in its entirety.”
She added: “ Landlords have only collected rent from tenants who have felt like paying it since March 2020 – but they have still had to pay their bills including salaries of staff essential to their businesses, as well as mortgages and insurance.
“There are some great examples of Landlords who have put aside funds to support their tenants, making sure that it goes to the businesses that really need the support – the independents and start-ups, who add such colour and flair to our communities. However many landlords do not have the resources to do this, and it should not be expected of them.”
Heather said: “ Large retail chains need to look at their own reserves, and if necessary, shareholders to provide finance – not their landlords.
“If their business model is failing, due to the change in the retail market, which has been changing for many years, then fleecing their landlords in an attempt to enable the business to limp along for a few more months is not the answer – this is the time these businesses should be looking hard at how they operate, and how they can operate successfully in the future.
“If support is required the government should be stepping in – with targeted support. Shared ownership is a well-established model for residential property – enabling many to get on the housing ladder. “
Heather said: “ For businesses with a future the government should consider establishing a fund to invest in businesses that need help now. The governments stake in these businesses could be a major asset in the future, not only in terms of dividend income but also capital gains as they divest in the future. Businesses will get funding to not only pay their rent and immediate overheads – but also funds to invest in the assets, and systems, they need to trade profitably in the future. The funding will be targeted, and based on a long term business model that will generate a return, both of which are factors that are critical in any future support provided to businesses.”