Landlords are on the brink of reaching a deal with retailers which could slash service charges by 20%, saving businesses millions of pounds a year in bills.
Some of the UK’s biggest landlords including British Land and Land Securities have been locked in talks with major high street names such as Next and Arcadia over the past few months, unable to agree service charges and rents.
However, landlords are expected to outline detailed plans tomorrow that will give much needed relief to retailers who are struggling in the economic downturn, according to The Daily Telegraph.
The new plan, which is based on a pilot scheme carried out in four shopping centres, will focus on 10 key areas where money can be saved, from security costs to waste management to the procurement of any third party services. It aims to shave up to 20% off service charge bills.
The deal has been spearheaded by Land Securities chief executive and president of the British Property Federation (BPF) Francis Salway, Liz Pearce, the BPF’s chief executive, and retailers including Sir Philip Green, owner of Arcadia.
Next property director Andrew Varley told the newspaper: “What we are trying to do is get more transparency for retailers. Why do we need to pay 10% managing agents’ fees for example? It is about finding out why certain costs are so high at certain centres.”
Arcadia’s property director Chris Harris added: “It is hoped that other landlords can now be persuaded to adopt this philosophy.”