Posted by The Grocer on 26th Mar 2020

Retailers forced to close this week are putting pressure on shopping centres do to the same, threatening hundreds of supermarkets and other stores selling essential products.

Shops ordered to close by Prime Minister Boris Johnson are refusing to pay shopping centre service charges, heaping pressure on already beleaguered landlords, it is claimed.

Shopping centre trade body Revo held crisis talks with the government on Wednesday (25 March) over who foots the bill for services such as cleaning and security staff.

There are roughly 300 covered shopping centres across the UK, many home to branches of major supermarkets. According to Revo, only around a third of landlords’ rent income on average comes from retailers permitted to stay open because they sell essentials such as food and medicine.

There is already a general acceptance from landlords that most tenants won’t pay rent for three months, according to Mark Robinson, a former Revo president who remains on the board. “That is being borne out in the data that we’re seeing come through on the rent quarter,” he said. “We’re probably going to end up with about a third of the rent.”

Added pressure is coming from retailers deemed non-essential now asking for centres to close to save on running costs.

“Every shopping centre owner I have spoken to is committed to keeping them to open to keep essential services running,” Robinson said.

“At the same time though we have got pressure from our non-essential tenants saying we want you to shut them now because we don’t want to have to pay any service charges.

“A huge amount of non-essential retailers are requesting rent and service charge concessions.”

Revo is leading efforts to keep shopping centres open in ongoing discussions with the government. The talks are focused on “making sure the owners’ community is supported to be able keep shopping centres open to allow essential retailers to keep serving the public,” according to Robinson.

He said “a number of options” were being “actively considered” by the government.Among the suggestions for helping landlords is a suspension of interest charges by banks.

A source at a leading property company said shopping centres were an issue major supermarkets had been “struggling” with since Johnson’s order on Monday that non-essentials shops should close.

“There will be stores inside centres and the whole centre might be forced to close,” he said. “It might get worked through but it’s an issue they are dealing with.”

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