I write with regard to the results of your web poll in the September issue, where 85 per cent of those who took part expressed the view that shopping centres should allow small independent retailers to trade at a subsidised rent.
It reminded me of a scene from the film Aliens where Ripley finds a little girl hiding from monsters that have eaten everybody including her parents. When comforted by Ripley and told everything is going to be all right because some tough soldiers have come to rescue her, the little girl just says: "It won't make any difference." How right she was.
It's the same with your poll. They won't admit it but most asset managers acting on behalf of large landlords have only one remit: 'Let to the highest bidder with the strongest covenant'. They have relentlessly pursued the onward and upward-only argument with regard to rentals and their whole business ethic seems to be based on the simple premise of 'It'll be all right because it always has been.'
This is not so. Like it or not both large and small retail businesses are now showing great caution when considering long, expensive leases that include upwards-only rent reviews. The days of 'pay anything just to open the doors for new product' have long gone.
E-commerce is starting to affect everyone, and it is still growing by about 50 per cent year on year. When you consider that most people take the easiest route to just about anything then you'll find that more and more of them are ordering online - paying less for goods that arrive gift wrapped the next day.
All that shopping centre managers will be left with to promote their particular centres is the attractiveness of their Christmas baubles and the number of car parking spaces that are available. The retail offer won't be worth talking about because it'll be the same as everywhere else.
Landlords had better get used to a reduced income stream because that's what's going to happen. We have already seen what happens to void units at Christmas time. Again, they are let to the highest bidder who then suddenly opens in November selling cheap giftwrap, often in direct competition with existing long-standing tenants who have given nothing but quality, continuity and value to that retail offer. Thanks a lot chaps.
The best thing about it all is that, unless there is radical change, the whole thing will go down rather like the Titanic. Let's hope that those who have caused it to happen do the decent thing and go down with the ship, although I strongly suspect that they are rapidly cultivating long tails.
Howard Bills, partner
Keen Menswear, Chelmsford.
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