Ellandi’s Summer of Love – The transparent line between love & hate
Posted by Ellandi on 8th Jul 2015
On Thursday 2nd July,
Ellandi hosted it’s 4th annual Retail Rocks Conference at the
Geological Society titled “Summer of Love – It’s a thin line between love &
hate”. The conference, which has quickly
become seen as the leading shopping centre property conference, was well
attended by approximately 150 senior industry participants.
As always, the afternoon began with
opening comments by Managing Director Morgan Garfield and Property Director
Mark Robinson, who together founded the business seven years ago. Morgan explained how the market has improved
over the last 4 years and how Ellandi had grown to meet these challenges, followed
by Mark, who discussed Ellandi’s achievements in the last year including the
opening of the very first Pep & Co store at the Ellandi owned Newlands
Shopping Centre the previous day.
One: “Landlord & Tenant Relationships – Why can’t we get on better?”
The panel consisted of Andy Bond (Pep
& Co), Andy Garbutt (Poundland), Mark Bourgeois (Capital & Regional),
Allan Lockhart (NewRiver Retail) and was facilitated by Nicola Harrison (Retail
The session discussed a number of the
challenges that affect the relationship including the perception from tenants
that landlords were being unrealistic about the value of their property and the
nationwide disparity around rates. Allan Lockhart pointed out that whilst the
landlord and tenant relationship post-recession appears to have improved due to
shorter lease terms, there are still a number of issues.
To this Mark Bourgeois commented “the
Landlord & Tenant Act of 1954 is a good starting point to improve dialogue
between the parties, however it feels strange that the 1954 act is still being
used when shorter leases are the norm” and went on to comment that the Act
should be abolished rather than simply modernised.
Andy Bond spoke of his recent
negotiations on his 50 stores in 50 days campaign and highlighted that
“landlords have been hugely responsive to the changing nature of retail”.
Lockhart added that retailers and occupiers will have to work closer together
whilst Bourgeois stated that landlords will have to become even more flexible.
The discussion quickly turned to the
lack of transparency regarding sharing of information between landlords and
tenants in the UK when compared to various parts of the continent. Andy Garbutt
suggested that transparency is great in theory, but in reality retailers worry
about how this would affect them at the point of renewal. Garbutt went on to
suggest that perhaps landlords should be using a third party to collate sales
data from retailers and aggregate it to provide an overall figure. Bond agreed
that data would be helpful for tenants as well as landlords and therefore Pep
& Co would be happy to share figures as necessary.
Note Speaker: What can the UK Shopping Centre Market learn from best practice
Mark Owen of Resolution Property took
to the stage and compared the differences across the continent from the 3,6,9 and
3,6,10 lease models in France which allows a larger degree of flexibility for
the retailer and often automatic renewal in the 10th year, to the
5+5 lease structure in Poland which involves little negotiation leading to
shorter void periods with index-linked rents and no zone A rent.
that lease structures are volatile and changing and that closer relationships
between retailers and landlords, sharing turnover data and footfall continues
to be the best way forward.
2: “Will a continental model of ownership damage shopping centre investor
The last panel session consisted of
Gabrielle Berring (Lloyds Bank Commercial Banking), Andrew Haines (Chenavari
Investment Partners), Cameron Spry (Tristan Capital Partners) and Anuj Mittal
(Angelo Gordon) and was facilitated by James Wallace (CoStar News).
The session centred around the fact
that many challenges facing landlords across the UK and the rest of Europe are
similar however because European shopping centres typically have smaller units,
retailers in the continent have more power than historically so.
When questioned about how the
continental model differs from the UK model, Anuj Mittal took the discussion
back to transparency saying that “there is better transparency regarding the
credit of the tenant on the continent”.
As the discussion drew to a close, Gabrielle
Berring pointed out that transparency, both in terms of relationships with
retailers and landlords, is often down to how good the asset manager is.