Coronavirus Forcing Landlords To Negotiate On Shop Rents

Published on: 29 Jun, 2020
Updated on: 30 Jun, 2020

By Hugh Coakley

The reality of zero income in many shops due to the coronavirus lockdown is forcing landlords to offer rent reductions and changes to payment terms to struggling retail independent shops in Guildford.

Four empty shops in a row in the upper High Street with another, the TSB, due to close in July.

The Guildford Dragon NEWS carried out a survey on Friday (June 26) of 10 independent shops in the town centre. Three of those surveyed had paid no rent since March and two of those were not expecting to pay the quarterly rent which was due at the end of June.

Of the remaining seven, three shops reported temporary reductions of up to two thirds and potential significant permanent reductions were being discussed.

One tenant told The Dragon that their landlord had said to pay what rent they could. She said: “We will continue to pay what we can afford while business is like it is. We will then renegotiate.”

Landlords were also offering to defer rent payments and to change payment terms from quarterly to monthly and, in one case, even weekly.

This is a change to previous years when landlords were expecting and receiving “upward only” rent reviews which were enshrined in the commercial contracts.

The increasing rents had not reflected the poor retail conditions in the high street with increasing numbers of shops closing due to falling footfall and online competition.

North Street has been badly hit with shops closing leaving some parts of town looking desolate .

The national picture made grim reading for retail property landlords who received only 13.8% of rent owed in June, compared to 19.8% in the previous quarter. National press had reported that major chains, Top Shop and Primark who have branches in The Friary, and Burger King had stopped paying rent in March as the devastating impact of the coronavirus hit.

One tenant of a small shop in the town centre who wished to remain anonymous said that when his landlord had pressed him for his rent, he had told the landlord to visit Guildford and see the number of empty shops in the town for himself.

A report by Sir John Timpson in December 2018 said that UK high streets “had twice as many shops as needed.” The sudden impact of Covid-19 might have accelerated this anticipated reduction in retail space.

Will Covid-19 accelerate the closure of shops in Guildford town centre?

The majority of the independents interviewed had received the emergency coronavirus government grant. (see Guildford businesses reminded to apply now for remaining £6.25million grant funding)

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