Retail landlord Land Securities will no longer offer retail tenants rent concessions amid signs of increasing demand for space, leading to claims that landlords are back in the driving seat at the negotiating table.
Land Securities chief executive Francis Salway told The Times: “The downturn has been tough on property companies and on retailers. There are instances of retailers still asking for concessions, and it can be in our interests to show flexibility in specific areas, and we have led on a number of such initiatives. However, we do not believe across-the-board changes to agreed contracts are appropriate.”
Land Securities is the largest property developer in Britain, and has 1,600 retail tenants including John Lewis and Next.
The revelation came as Land Securities revealed it was offering a new lease that does not penalise tenants for paying monthly instead of quarterly, according to The Times. It intends to roll it out to its entire portfolio.
The new agreement called the Clearlet lease, will see the landlord scrapping the 1% premium on monthly payments.
Land Securities comments were supported by the British Property Federation. Its chief executive Liz Peace said: “We’ve seen first hand the steps landlords are willing to take to help retailers, from offering monthly rents to working with them to reduce service charges. But the fact everyone needs to understand is that cutting rents too far would undermine the investment value of retail property.”
Rival landlords British Land and Hammerson have also noted an increase in demand for properties from retailers.
A spokesman for British Land said: “It is a question of who has the upper hand, and where there is good demand from tenants and low vacancy rates, landlords do not need to give more.”