This is a message to big business (with a side note to government). This is a message calling on you to stop taking advantage of measures not designed for you and to be fair, decent and collaborative.
As another quarter day passes under the cloud of coronavirus, landlords across the country have been left impotent. Completely unable to do anything when a tenant refuses to pay their rent regardless of who that tenant is, whether that tenant has continued to trade during the crisis, and of how much money that tenant has flowing through the business.
The moratorium on rents, first launched in March then last month extended to the end of September, looks increasingly likely to be extended again as government continues to place all its aid at the feet of retail, leisure and the hospitality sector.
That is not saying of course that retail, leisure and hospitality businesses don’t need help. It’s not saying that those sectors aren’t a huge employer of people, or taking anything away from the fact that we absolutely need to safeguard jobs as we work our way out of this crisis.
But the imbalance of all this has got to stop. Government could be forgiven for not quite getting the balance right for the first three months of lockdown. It had to make decisions quickly. But it cannot keep ignoring the voice of the commercial property-owning community. This community, as our research has shown, is not a community with endlessly deep pockets, and it is not a community that can support an entire economy without some support of its own. It is a community largely made up of Joe Public, not highly capitalised fat cats.
It can and is doing its best to help those who really are struggling to make ends meet. Landlords have committed millions of pounds in rent relief to struggling businesses. They have held out a hand to help mama-and-papa retailers to make sure that when we do emerge from this crisis, those independent and entrepreneurial stores can bounce back too. Landlords are having open conversations with businesses about how to work together to navigate these choppy waters.
Kudos has to go to the retailers that are standing by their obligations and working hard to collaborate with their landlords, so thank yous for being decent human beings go to Home Bargains, DFS, The Range, Dunelm, Howdens and Pets at Home. If those retailers can have collaborative conversations with their landlords, if small retailers that welcomed even a few customers back as lockdown began to lift can start to pay their rental obligations, then why can’t businesses with turnovers in the billions? And why isn’t government cracking down on the injustice of billionaire – even soon to be trillionaire – businessmen, abusing a system designed to help the needy?
It needs to stop. Measures need to be put in place to make sure that aid is directed to the right businesses. That real estate gets some of that aid. The government’s “build, build, build” rhetoric will mean nothing if our landlords are left with nothing. Investment in a circular thing. Money in is needed for money out.
Some tenants – like brewer to bar operator Brewdog – get it, asking for support for landlords and occupiers alike. Others like Mike Ashley’s Frasers Group, which has told landlords that it intends not to pay rents until trading improves, seem not to.
“There is massive disappointment that some large well capitalised retailers, who clearly can pay, are deciding not to,” says LondonMetric boss Andrew Jones on p13. “While we recognise this has been a challenging time, that is not their prerogative and we have a legally binding contract which we will enforce. We simply cannot transfer value from our shareholders to theirs without due compensation.”
It is going to take time to come out of this crisis and it is going to take teamwork. Business absolutely has to work together. The balance needs to be reset, and government needs to make sure that those that can pay, do pay.
To send feedback, e-mail samantha.mcclary@egi.co.uk or tweet @samanthamcclary or @estatesgazette
