Hammerson, one of the largest retail landlords in the UK, has recently announced plans to slash rents by approximately 30% as stores begin reopening following the third national lockdown. While the company has not officially confirmed the rent reduction, Mark Bourgeois, Managing Director for the UK and Ireland, mentioned it during an interview on the BBC Today programme. Bourgeois stated that the aim is to reset rents to more affordable levels and provide continued support to retailers.
With properties such as the Bullring in Birmingham, Brent Cross in London, The Oracle in Reading, and Victoria Quarter in Leeds under its ownership, Hammerson has been actively working to collect rent during the pandemic while acknowledging the difficulties faced by retailers. By reducing rents, the company hopes to alleviate some of the financial pressure and share the burden with its tenants. However, it remains uncertain whether these rent cuts will be a permanent or temporary measure.
According to Bourgeois, Hammerson is taking the necessary steps to maintain the vibrancy of its shopping centers. He estimates that rent reductions across the board could reach around 30%, signaling a significant change within the property sector. Over the past year, landlords have come to accept the commercial reality as retailers renegotiated rents to more manageable levels, often through company voluntary arrangements. Furthermore, many property owners have experienced closures as retailers faced insolvency.
Resetting rents at a lower level is a crucial decision for landlords in ensuring the collection of rental income owed to them. Throughout the past year, numerous property owners have struggled to recover a significant portion of the rent due to them. By implementing these rent reductions, Hammerson is taking a proactive approach to support both its own business interests and the success of its retail tenants.
Bourgeois also highlighted a positive trend in footfall during the first phase of reopening, surpassing the equivalent period last June. He attributed this increase to the success of the UK’s vaccine rollout, which has instilled a sense of safety among shoppers. Additionally, consumers’ substantial savings accumulated during lockdown have fostered confidence in venturing out and spending.
Overall, Hammerson’s decision to reduce rents by approximately 30% showcases its commitment to supporting retailers during this challenging time. As stores reopen and the retail sector gradually recovers, these rent cuts will provide much-needed relief for tenants and contribute to the overall vibrancy of shopping centers. Moreover, the company’s proactive approach aligns with the changing dynamics of the property sector, emphasizing the importance of adaptability and collaboration between landlords and retailers.
Useful Links:
1. Hammerson Official Website
2. BBC Today Programme
