Commercial landlords 'not helping' tenants hit by lockdown

By The Editor

20th Mar 2021 | Opinion

Empty retail units in the High Street.
Empty retail units in the High Street.

The pandemic has been disastrous for some independent businesses, with many closing their doors never to reopen, while others face an uphill battle to recoup the losses of three lockdowns.

While many have praised the Government and local councils for getting financial aid packages in place, such as rate holidays and furlough cash, one sector that appears not to be offering concessions is commercial landlords.

That's the view of Godalming Chamber of Commerce vice-chair and The Godalming Deli owner Kevin Depree. He's frustrated, he says, that while some landlords have given their tenants rent reductions or holidays, others have continued to charge full rent while their business tenants struggle.

Mr Depree told Godalming Nub News: "The Government has put in place a number of support mechanisms for small independent businesses such as mine. I think the furlough scheme has been very useful. But I have spoken to lots of people in the High Street, and they are in a difficult situation. Businesses are struggling and the High Streets are failing.

"The thing that gets me, though, is that everybody looks at the Government or at local councils. The thing they never look at is commercial landlords. Some landlords are sitting there just taking the same amount of money from the tenants as they did before, without offering any concessions.

"Some people never get to talk to their landlords. They sit behind lawyers and management agents, so trying to build a relationship with your landlord can be extremely challenging."

Describing business rents as "astronomically high in towns like Godalming," Mr Depree says he worries that even big towns such as Guildford are also struggling under the weight of high rents that have seen independent shops - as well as chains - pull out in their droves, which, he says, is "such a shame."

"I think some landlords charge too much rent or don't think about being flexible based on the current environment," he said, recounting an occasion when one landlord in Godalming wanted to reduce the rent on their retail unit, to attract a tenant, but backed down, he says, after pressure from other landlords in the town.

High rents operate to act as a disincentive to independent retailers, he says. Larger chain stores, however, can draw on financial reserves to ride financial storms and continue to operate in the face of difficult economic conditions.

"The upshot is, the only shops that can afford these rents are the big chains," he says.

"Another issue is that when a building sits empty the landlord pays reduced rates." He cites the example of one retail unit in the town centre that, he says, has sat empty for three years while the owner "decides what to do with it".

There are some positives: one local landlord that owns several properties in Godalming gave tenants a rent holiday when the first lockdown was brought in, he said.

"The trouble is, if the landlords don't live here they don't seem to worry that the buildings remain empty, and they don't seem to care that the High Street is failing," he added.

"Something, somewhere has to change in order for the High Street to survive."

What's your view? Are your business rents too high? If you're a commercial landlord, or a business owner, let us know what you think by getting in touch here.

     

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