Retail landlords must be flexible -There are an increasing number of empty premises on high streets around the country, although figures are not clear or easily obtainable. There have been calls to government and the local authorities to do something about the situation, but is there anything that Landlords can do?
Tough times
The Olympics – Hopes of a boost in the economy with increased retail and tourism in and around London. It never happened. Boris Johnson, Mayor of London even acknowledged that Olympic retail figures were not as they were supposed to be.
Online shopping – Internet shopping is squeezing retailer profits significantly, meaning that more and more are having to close down. They are relying predominantly on the ‘shopper experience’ to attract customers.
High street monopolization
Intense competition between high street giants has led to substantial store closures, leaving dominant competitors behind. The introduction of Sainsbury’s Local, Tesco Express and Cooperative have meant unprecedented convenience for the consumer leaving small scale and family businesses unable to compete. Optical Express has recently decided to close one quarter of its stores due to increased competition from the likes of cosmetics giant Boots. We have also seen family owned petrol stations are closing at a rate of 600 per year due to the mounting dominance of large petrol companies and supermarket forecourts.
What can Landlords do to help?
The fact is that empty shops are aesthetically unpleasing, diminish an area’s reputation and ward off business. It’s bad for other shops. Not only that, but having an empty premises costs landlords money, whether its property insurance, repairs and other outgoings.
It is in the landlord’s interest to make shops easier to rent out. Updating lease terms and making renting more flexible considering allowing short stay renting, rent free periods and rolling break options. In the current economic climate new tenants will be careful not to enter into long leases but landlords should remember that the tenant pays for most of the expenses and should their business do well you could expect a lease renewal.