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London rents must be affordable, says BSSA

The British Shops and Stores Association has called for guarantees that premises earmarked for small businesses in new developments in London will have affordable rents.

The BSSA, which represents small businesses, was responding to proposals from London mayor Boris Johnson to make developers include affordable small shop units for independent retailers as part of any new retail developments.

BSSA professional services director Bob Jarrett welcomed the idea but said it would only work if landlords provided affordable rents and favourable lease structures for indies.
“There are new retail developments springing up all the time, and it can be very difficult for independent retailers,” he said. “Business rates are another key factor – revaluation in 2010 on that will be a crucial element. Paying rents on a monthly basis, rather than on a quarterly basis, is as much an issue for independents as it is for multiples.”

The proposals announced by the mayor last week could be implemented within the next eight months following a consultation period.

Johnson said: “Our small shops add real character and diversity to the capital’s high streets but they are finding themselves squeezed out by competition from supermarkets and rising unsustainable rents.”

Ian Henderson, head of retail planning at retail property agent CB Richard Ellis, said that although the proposals were well intentioned, implementing them would require a lot of legislation.

He said: “It poses many more questions, such as whether you target a local shop owner or independent trader? If so, how is it policed? If a local shop owner develops his business and opens more than one shop, is he then evicted as he is better able to afford market-set commercial premises? Is the rent subsidised, or capped? Is there a limited one- or two-year lease?

“If it isn’t carefully set out and policed, the key people who are likely to benefit in the long term will be the consultants and lawyers.”

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