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PG Legal Limited

Commercial Transactions and Commercial Property – with the recent demise of Jane Norman many landlords will be wondering how they can justify retaining retail units with few or no tenants vying for space. If a unit is empty the landlord will be paying rates for a unit with no tenant. Holding on and waiting may not be an option if you have share holders to satisfy.

The reality is that there has been a reassessment of rental levels in the market place.

Landlords who previously only saw their rental levels going up are now more than willing to work with tenants to ensure that businesses can keep going through these tricky times.

Landlords with tenants who are struggling are more willing than ever to discuss alternative arrangements, from agreeing rent free periods now tied in to an increased rental level later, to reducing the rent but agreeing a longer term, Landlords are finding ways of keeping their shareholders happy whilst retaining the tenants who form the life blood of their business.

For those landlords who already have vacant units, they are now considering allowing solid businesses, but who trade as discount retailers, into premium areas within their shopping centers on temporary low rent leases. This maintains footfall to help the remaining tenants, provides some income (and importantly removes the landlord’s liability to pay rates for the unit) and gives retailers a chance to try out a location before they consider committing to a longer lease.

The effect may be a long term change to your high street. The reality is that the high street in every town has looked virtually the same for some years, the same brands, the same format and the same products. The keenness of landlords to accept tenants they were not previously interested in, to avoid the charity shop-takeaway- coffee shop scenario, may mean that there is an opportunity for smaller brands to take units leading, we would hope, to a greater diversity of retailers making a walk down the high street more attractive than browsing the PC.

Once we finally get out of these commercial doldrums it will be interesting to see who stays where, but in the meantime the current downturn can be the source of opportunity for those who can think of alternatives to their normal business model.

This was posted in Bdaily's Members' News section by Phillip Dean .