Quarterly rental payments ‘archaic’ according to BRC
Published: 21 December, 2010
Progress on increasing the proportion of property on monthly rental terms has stalled according to The British Retail Consortium’s second annual Monthly Rents Survey.
The survey, taken by 13,400 stores responsible for 34 per cent of retail turnover, shows modest improvement in some aspects of the rental regime but deterioration in others, showing ‘too little progress on rent reform which should allow retailers to switch away from the archaic practice of quarterly upfront payments’.
Last year the BRC found the proportion of property leases on monthly terms had risen from three per cent to 12 per cent over the previous two years. The new survey shows that in December 2010 that figure is still 12 per cent.
The BRC has long argued that landlords should offer the option of monthly terms as a matter of principle not simply as a response to difficult economic conditions.
Stephen Robertson, British Retail Consortium director general, said: “While it’s clear that some landlords have moved a long way on offering retailers a more flexible rents regime, there’s a significant proportion that have not. Some retailers have even told us they’ve had a hostile reaction when they’ve tried to renegotiate rental terms.
“Quarterly rental payments are a throwback to a bygone age. Such an anomaly has no place in the age of the internet. Modern banking practices make monthly payments easy to process and they are the norm in virtually all other areas of business.
“The best landlords recognise that it’s in their own interests to have their properties occupied by thriving businesses and are showing a willingness to work with tenants. Monthly rental terms can help achieve that by easing cash flow pressures. More should be willing to offer this option.”
