Retailers and landlords call on government to underwrite retail rents

In a letter to Rishi Sunak, a coalition of the UK’s biggest retailers and property owners warned “many viable companies” will be forced to shut down or file for administration if the government does not do more to save the embattled high street during the coronavirus pandemic.

In a letter co-signed by the BRC, British Property Federation and Revo, the scale of the damage being done to the retail sector was described as “grave” with many businesses, already operating on small margins, being driven to the point of destruction.

It said: “There is a real risk that businesses that were fundamentally sound prior to the start of the coronavirus outbreak will not be able to survive even a short period without urgent, more fundamental support, with important consequential effects for their landlords and their landlords’ lenders.”

While the letter welcomed action already taken by the government to support businesses by offering business rates holidays for the year, it pointed out that “two-thirds of property costs” are still payable.

“Businesses and their landlords have been working hard to find solutions, such as rent deferrals and rent-free periods, that try to balance the needs of both parties, but the truth is that with little or no turnover from trading, ongoing payment of property costs will imminently become impossible,” the letter said.

Retailers and landlords have called for a furloughed space grant scheme to be set up by the Treasury, mirroring similar schemes being rolled out in Denmark and other European countries.

The groups proposed the scheme would be covered by a sliding scale of partial payments covering property costs, which would still leave some of the burden on both the tenant and landlords.

“Time is of the essence,” the letter warned. “Without rapid action on rents, we risk creating unnecessary unemployment and economic harm that will ripple across the country for years to come.”