Hammerson & British Land say they are still hopeful for a “retail rebound” despite struggling with third quarter rent issues, managing to collect just 16% and 36% respectively of the rents due to them for the third quarter 2020.
With the coronavirus crisis coming on top of many already struggling retail stores, many High Street or shopping centre located tenants are struggling to survive faced with the inexorable rise of online sales and home deliveries,
Despite this, and the shopping centre giant Intu’s fall into administration last week, the companies say they are confident that their rent collection rates will improve.
In an update this week British Land confirmed that 64 per cent (or 894) of stores across its centres in England have now opened and have witnessed a sales surge 91% above the first week of reopening.
Both Hammerson and British Land have put out statements this week to reassure investors, reporting that footfall climbs and sales were encouraging for their English retail tenants, after the store restrictions were lifted for non-essentials from June 15.
Hammerson owner of the Bullring shopping centre in Birmingham and Brent Cross in north London says it is confident that it’s rent collection rates will continue to improve ‘materially’ as they renegotiate their lease agreements with individual store owners. They have managed to secure a “breathing space” from lenders, and they say they have also accessed the Government’s coronavirus support scheme to shore up its finances.
British Land, owners of the Meadowhall shopping centre in Sheffield and office buildings in London, also say they are optimistic that rent collection rates will improve over the coming weeks as they continue to renegotiate their agreements with their tenants.
‘We expect the best-located open-air retail parks to perform an important role in retailers’ reopening strategies, and this was reflected in positive like-for-like sales for out-of-town stores open in England versus the same week last year,’ says British Land.
The group had more success collecting rents from office building tenants, with a collection rate of nearly 90% during the quarter.
However, it has had to write off around £5 million worth of rents due from smaller retailers and it is in discussions with larger retailers over a move to monthly rent periods, re-scheduling overdue rent payments and discussing variations to lease terms.