BRC: Commercial landlords should abandon quarterly rents
23 January 2012
Written by Jenny Barrett
Quarterly rental charges are damaging business, a leading organisation has claimed.
British Retail Consortium (BRC) spokeswoman Sarah Cordey said these charges can result in enterprises facing "cash flow challenges".
Many corporate landlords - some of whom will be commercial mortgage holders - ask for rent in this way and she claimed this causes a "spate of problems" every three months.
For example, the last quarterly rental date of 2011 immediately followed Christmas, the BRC representative pointed out, noting some companies may have experienced poor trading over the festive period and would have had to face a three-month advance bill.
Ms Cordey called this kind of transaction "completely unnecessary in this modern age" and an "anachronism", arguing instant bank transfers are more appropriate.
Landlords ought to accept monthly payments, as this would "iron out some cash flow issues" for their tenants, she remarked.
Overall, 2011 was a hard year for retail firms, with the VAT increase of 2.5 per cent and inflation typically running at five per cent causing "very little growth year-on-year", the spokeswoman pointed out.
Trends seemed to indicate that consumers were purchasing fewer items and a small heightening in sales by value was less than what would have been expected in light of other economic data, Ms Cordey stated.
This made Christmas trading "even more critical than usual" and although it did boost the profits of many corporations, in some cases this was "not enough to make up for very disappointing business during 2011", she asserted.
Data from the Office for National Statistics showed a year-on-year growth of 2.6 per cent in sales volume over the holiday season, with transactions experiencing a 6.2 per cent rise.
However, the public body indicated this increase was offset by a decline in the goods sold by household products companies and other stores.
Furthermore, a range of the UK's high street shops, such as La Senza, Pumpkin Patch and Peacocks, have recently entered administration.
