Property giants have proposed that there be a six-month respite for retail and hotel landlords and tenants to settle billions of pounds in rent arrears linked to the pandemic.
Proposals to resume “normal market operation” from June 30 come as the retail market begins to come back to life after the last foreclosure.
The owner of the Westfield shopping centers said his London sites saw more than one million visits in the week starting April 12 and footfall was 75% of the 2019 level.
Meanwhile, WH Smith plans to expand with around 100 new travel stores.
UK owners Land, Landsec and the British Property Federation have presented their suggestions in response to the government’s call for evidence on how best to remove or replace the measures that have helped high street businesses overcome the virus crisis.
A ban on business evictions came in last year and was recently extended until June 30.
While some tenants agreed to suspend rent or defer rent with landlords during the pandemic, a number did not and feared they could not afford the unpaid rent, after suffering months of closures in lockout period.
Meanwhile, in some cases, landlords claim that occupants who refuse to pay rent are big, profitable businesses.
According to the latest proposal from the real estate industry, normal rents would resume from the June quarter date and payments due before that date would be capped. All parties would have until December to work out plans, such as full refunds, postponements or discounts for example.
Payments may be deferred after this date if an agreement has been reached.
When an occupant and owner are unable to reach a settlement, they go to binding arbitration.
Simon Carter, Managing Director of British Land, said: “This is about moving forward and out of the pandemic, so that customers can trade without fear of the arrears hanging over them, and of landowners. can be confident to invest in post-pandemic recovery. “
We recognize that the arrears will take time to resolve and will require the cooperation of all parties. That is why today we are offering a solution that recognizes and addresses the challenges that the real estate, retail, hospitality and leisure industries have faced over the past year https: / /t.co/sjdXfJRpyY
– Simon Carter (@SimonGCarter) April 29, 2021
Landsec boss Mark Allan said: “This proposal is a practical solution, with the interests of all parties at its heart. By separating historical rents due from future rents, this will allow a return to normal market conditions that will help stimulate the economic recovery from Covid-19. ”
Melanie Leech, Managing Director of the British Property Federation, said: “The majority of landlords have already struck a deal with their tenants, providing millions of pounds of support to tenants hardest hit by Covid-19. However, as public health restrictions ease and consumer confidence and spending continues to grow, we must now find a fair solution to resolve the stalled talks so that all parties can come together. focus on the future.
Tom Ironside, Business and Regulatory Director at the British Retail Consortium, said: “Retailers want to work constructively with owners to find a deal that works for everyone, and this proposal is a positive start. However, before such a system can be feasible, it must close the loophole of using CCJs to drive out tenant debt, otherwise the whole proposal to limit arrears will be undermined.
He added: “A viable system must also allow tenants to retain their legal right to restructure businesses in order to better manage their debts. We look forward to working with the owners to improve the proposition, ensuring that all parties share the pain equally. It is the best way to protect jobs, maintain business trade and support economic recovery. “