Commercial property owners have warned they could struggle in the face of the coronavirus pandemic, after missing out on millions of pounds worth of rent payments due today.
Quarterly rent bills were due to be paid by thousands of businesses on Wednesday, but the Government announced on Monday that landlords would be unable to claim forfeiture or repossess properties for the next three months if rent is not paid.
Some of the UK’s biggest landowners laid out plans to support under-pressure retailers, pubs and restaurants in response today, while others remain locked in negotiations.
Shopping centre owners and other property firms have warned ministers that they will face “extreme challenges” without support to replace lost rent.
Edward Cooke, chief executive of Revo, said talks were under way with the Government about what support can be made available to landlords, potentially in the form of loans or grants.
He said: “We want these companies, which support thousands of jobs and invest billions in UK towns and cities, to survive, and most will with the right interventions.”
However, hospitality business owners have warned that some landlords have still demanded payment today.
Jonathan Downey, founder of Street Feast, told BBC Radio 4: “I run a WhatsApp group of over 2,000 business owners and some have been amazing, like Shaftesbury and Argent in London.
“But I can quote some who have said ‘we will be coming down hard on any tenant who doesn’t pay their rent and service charge today’.”
Trade bodies and hospitality business owners celebrated news of the rent reprieve on Monday, claiming its will protect jobs.
Kate Nicholls, chief executive of UKHospitality, said hospitality businesses “want to work with landlords constructively during this crisis”.
However, analysts have said that some property owners could default on their own loans if they fail to secure expected rent payments.
Andy Pyle, UK head of real estate at KPMG, said: “If rental payments are to be missed, property companies will be under increased pressure to pay interest on their own loans and they may even default.
“This will impact those invested in commercial property, some of whom may depend upon the regular income it provides.
“Far from just private or family wealth, these investors include those in receipt of pensions and savings, shareholders in REITS (real estate investment trusts) or beneficiaries of company and state pension schemes.”