Hammerson cuts store rents by 30% as it continues retailer support
Hammerson is to slash rents for its retail tenants by around 30% as UK stores reopen post-Lockdown 3. The company hasn’t issued a formal statement about the rent reduction but UK & Ireland MD Mark Bourgeois said on the BBC Today programme that “typically, we're resetting our rents to more affordable levels”.
The landlord owns a raft of properties, including the Bullring in Birmingham, London’s Brent Cross, Reading’s The Oracle and Victoria Quarter in Leeds.
It has been working to collect as many rents as it could but also aimed to “share the pain” with retailers and said it will continue to support retailers post-reopening. That includes rent reductions, although we don’t know how permanent these cuts will be.
Bourgeois added: “We reckon across the board and our business we'll probably reduce rents from their peak by about 30% so we are really doing our bit as are... all landlords to make sure we maintain vibrancy in these centres.”
Landlords have been forced to accept commercial reality in the past year as companies have renegotiated rent to more affordable levels, sometimes with the backing of company voluntary arrangements. Property owners have also seen a large number of stores closing permanently as retailers have gone under.
The reset as far as rents are concerned makes sense if landlords want to ensure that they can collect as many of the rents they're owed as possible. The last year has seen multiple property owners admitting that they were unable to collect a large proportion of the rents due.
Resetting rent levels to around 30% lower than those agreed is a massive step for such a big name in the property sector, especially as until recently rent reviews were always upwards only.
Bourgeois also said that footfall in last week’s first reopening phase was stronger than in the equivalent period last June. He said he thinks the UK's successful vaccine rollout has made shoppers “feel safer” and that the large amount of cash they've saved during lockdown makes them confident to go out and spend.
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