Collaboration Needed Between Landlords And Tenants
The impact of rent quarter day on March 25th will mean that troubled retailer, Game, will not be the only high profile company to appoint Administrators over the next couple of weeks – predicts Chris Jones, Restructuring Partner at law firm Irwin Mitchell in Manchester.
This weekend, thousands of companies across the UK will be expected to pay rent on their property space. However, with tough financial conditions taking their toll on many over the past 12 months, it is likely that some firms could be facing problems when it comes to meeting payments.
High street retailer, Game, which this week announced its intention to appoint Administrators, has a £21m rent bill due which it reportedly can’t afford to pay. Last year retailers such as Habitat, Homeform and Jane Norman all went into Administration shortly after June’s rent quarter day.
Chris Jones, a Manchester-based Partner in the team, said: “Despite some retailers no longer paying their rent every three months, it is clear from what we have seen in the last 12 months that many still do. What is also apparent from the number of Administrations occurring around rent quarter day, is that its impact can be extremely damaging.
“I’m afraid I don’t think Game will be the last high profile casualty during the next few weeks. Although there is an argument to say that businesses that have managed to survive this long in an economic downturn are sufficiently robust to continue, I think a great deal are now operating on such tight margins that any small reduction in consumer spending can tip them over.
Mr. Jones added: “It is vital that any struggling retailer acts now by contacting their landlords rather than waiting until well into the 21-day payment period before they do anything.
“Landlords tend to be as aware as anyone about the difficult trading conditions being seen by many at present, adding that they may be willing to offer measures such as payment holidays or reduced rental terms to help tenants.
“Landlords will be well aware that there is not a standing army of new tenants ready to take the place of a tenant they get rid of and they may be left with an empty unit.
“It is very likely that they may consider options that will help them keep occupancy high despite the difficult economic climate.”