Yahoo Finance UK retail landlords squeezed as stores hit by Covid-19 crisis
Hammerson and British Land collected only a fraction of their rents due last month as retailers struggled despite the easing of the coronavirus lockdown in the UK.
Hammerson, the landlord that owns the Bullring in Birmingham and the Brent Cross shopping centre in north London, said it had collected just 16% of rent due in May and June, and had drawn down £300m in funding from its credit facility to support the business.
British Land, which owns the Meadowhall centre in Sheffield and Drake Circus in Plymouth, said it had collected 36% of rent due from its retail sites and 88% from offices, even though about two-thirds of the retailers had reopened by the end of June.
The company agreed to £3m in rent waivers for smaller, independent, cafes, restaurant and retail operators, for the June quarter, on top of £2m relating to the previous three months. Underlying sales at stores that have reopened are 9% down on the same period last year, though outdoor, out-of-town, locations are reporting growth.
Hammerson said nearly three-quarters of rent due in the UK across all its properties, including offices and retailers, for the first half of the year had been collected but that payments had dived from 99% of that due in the first quarter to 47% in the second quarter. Takings then fell to 16% in the most recent three months.
The company said 80% of stores eligible to reopen in “flagship destinations” had done so.
Landlords are under pressure with retailers shutting stores, restructuring or simply refusing to pay rent.
Last week, the shopping centre specialist Intu called in administrators after some debt providers on key sites refused to back a rescue deal. The company employs nearly 2,400 people and owns 17 shopping centres across the UK.
This week, TM Lewin and the furniture chain Harveys both went into administration, while SSP Group, the operator of train station and airport food outlets including Upper Crust and Caffè Ritazza, said it was slashing 5,000 jobs at its head office and UK operations after being forced to close outlets during the pandemic.
Department stores, including Debenhams and House of Fraser, have been closing outlets, and the fashion retailers Cath Kidston, Laura Ashley, Oasis and Warehouse have collapsed and shut all their stores.
Many of those still trading have asked for hefty rent cuts or holidays.
The sandwich seller Pret a Manger is seeking rent cuts of 70%, while the fashion chain New Look has asked landlords for rents based on turnover – equivalent to a cut of 50% in some places – at a time that is just more than two years since it won rent cuts of up to 60% through a restructuring deal.
