The move comes amid growing concerns about the retail sector with a string of high street brands collapsing into administration, including Faith, fashion chain Joy, Jeweller Mikey and furniture brands Roseby's and MFI.

The move does not apply to tenants in the malls that Hermes owns in partnership with Westfield and Hammerson, but only in its directly held portfolios.

Occupiers who want to convert from quarterly to monthly payments are being asked for a rental uplift of between 0.5 and 1.0 per cent to reflect the time cost of money and the costs of invoicing and payment processing. Tenants will also be asked to provide unit turnover data as part of the deal.

The fund manager, responsible for the pension funds of BT and the Post Office, has already agreed similar terms on a number of new lettings in its portfolio. It is also using the move to promote its green agenda, with new lease clauses designed to encourage occupiers to behave in a sustainable manner.

Hermes chief executive Rupert Clarke said: "We have analysed the opportunities and implications of introducing monthly rents and believe our solution should be attractive and relatively cost neutral to both parties. Obviously we are keen to work with occupiers to meet their needs on reasonable commercial terms and it also offers the opportunity to develop a good joint working relationship to continue to improve the environmental impact and sustainability of our portfolio."

Despite Hermes' move, other landlords have resisted the move to monthly rent payments. A high level meeting with a panel of retailers, chaired by Sir Philip Green, is understood to have failed to reach agreement on payment terms although it did make some progress on other issues such as upwards-only rent reviews.

Printer friendly version

Email this article to a friend

Bookmark this

---