British Land, Landsec and the British Property Federation have put together a proposal to deal with outstanding rents for landlords.
The industry titans are calling for rent arrears during lockdown to be ring-fenced for this period and protections extended until December 2021.
It would allow any outstanding rent from March 2020 to June 2021 quarter date to be dealt with, with concessions and deferrals where appropriate. Where a building’s owner and tenants cannot reach a settlement, they would submit to binding arbitration.
The businesses said by separating this period from future rental payments it would allow the market to return to normal as the economy reopens. The phases approach would “give businesses breathing space” and provide landlords with certainty to progress new investment.
Mark Allan, chief executive at Landsec, said: “Nobody wants to see good businesses fail, particularly responsible landlords who have invested, either through capital expenditure or rent concessions, in those businesses, and are focused on creating thriving retail locations for the long term. This proposal is a practical solution, with the interests of all parties at its heart.”
Simon Carter, chief executive at British Land, said: “Difficult problems require compromise on all sides, and our proposal recognises and addresses the challenges the property, retail, hospitality and leisure sectors have faced over the past year.
“Looking ahead, the priority must be a move towards more normal market arrangements, while recognising that arrears will take time to work through and require cooperation from all parties”.
The proposals follow a call to action from the BPF, seeking landlord testimonies and evidence of the effect of the moratorium on owners.
Melanie Leech, chief executive at the BPF, said: “A return to normal market conditions is vital for the millions of pensioners and savers invested in commercial property, and will enable property owners to make investment decisions today that will underpin new regeneration across the country, creating new jobs and fit-for-purpose town centres, and supporting our nation’s Covid-19 recovery.”
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