Retail landlords are feeling the pain with some £2.5bn in retail rents being due at the end of March, according to trade body the British Property Federation (BPF). The BPF is calling for government and regulators to work with lenders to help commercial property businesses. It says, the property industry cannot absorb vast losses, because landlords have debts to service.
Melanie Leech, CEO of the BPF, states: “As property owners offer relief to their tenants, there is a very strong case for lenders to provide debt service deferral to owners in return, to protect the 45 million savers and pensioners across the country whose money is invested in commercial property,” Leech said.
The Guardian reports that some investors have already been caught up in the property-sector tumult, in that, “investment managers BlackRock and Schroders have both suspended trading in their UK real estate funds, saying it was difficult to obtain an accurate valuation of their assets.”
Intu Properties has been quoted to say: “we are happy to engage with brand customers on a case-by-case basis, but we have neither the desire or financial capacity to bankroll global, well-capitalised brands who have just decided they don’t want to pay their rent.”
The Guardian went on to report that “property firm British Land, which owns shopping centres including Sheffield’s Meadowhall, has scrapped rent between April and June for smaller tenants, and allowed larger firms to spread rent repayments.”
It was also reported that Criterion Capital, which owns London properties including the Criterion Building on Piccadilly Circus sent letters to tenants that warn of non-payment of rent will lead to a winding-up petition.
When the Guardian spoke with Kate Nicholls, CEO of UK Hospitality, which represents the cafe and restaurant business, she said “This is a sledgehammer to crack a nut and an entirely inappropriate use of the legal process, which will result in business collapse and administration.” The Guardian also reported that “the trade body has written to the government asking for an extension to the ban on evictions, from three to six months. UK Hospitality wants the measures widened to prevent property owners from issuing winding-up petitions or statutory demands.”
Source: The Guardian