Landlords including Arlington Property Investors, Land Securities and British Land could lose out on millions of pounds of rent following this week’s collapse of furniture retailer Courts.
Courts, which was forced into administration on Monday, pays around £30m in rent pa for its 81 leasehold stores in the UK. A further seven stores are freehold. The bulk, 66, are superstores, with the balance made up of high street shops.
Courts has paid rents up until Christmas, but administrator KPMG was unable to confirm whether rents would continue to be paid in the new year.
Paul Wilkinson, director at Wilkinson Williams, said: “If Courts has taken assignments, then the landlords could go back to the previous tenants, but in most of these cases Courts will have been the original tenants.
“If the lease was pre-1995, landlords can go back to the previous tenant, but it is more difficult to do that for leases that were signed after 1995.”
James Salmon, director of retail at Arlington, admitted that some landlords were worried about rents.
He said the collapse could be good news for landlords keen to get new retailers into their properties, although less successful sites could be left empty.
Courts also rents stores from Standard Life, Canada Life, Scottish Widows, Henderson and Prudential, among others.
Larger stores are expected to be sold off piecemeal, with the remainder being sold to private equity or trade buyers.
KPMG said it has already received expressions of interest in the stores from 50 parties.
Retailers tipped to take over the stores include DFS, SCS Upholstery, Land of Leather, Focus Wickes, Homebase, The Range and Dunelm.
Private equity firm SB Capital, which owns Furnitureland, has been tipped as a possible purchaser.
The Cohen family, which owns 44% of the company, is also thought to be keen to take back full control after Steven Cohen’s failed £50m bid in June.
The company has failed to record a profit since 2002.
References: EGi News 03/12/04
