The Financial Times has reported that Burger King, Carluccio’s and Yo! Sushi are among hundreds of UK businesses set to default on rent payments today as quarter day arrives.
Landlords look to lose out on significant sums following the closure of the high street on Monday night, with the government telling everyone to stay at home. Many retail and leisure companies operate on thin margins and would be unable to pay rent with no income coming in. Paying rent means that they would be unable to pay staff wages as the government support was unlikely to come through prior to the arrival of the quarter date.
It was reported that one property investor with a portfolio of shopping centres across the UK only expected 30 to 60 per cent of tenants to pay their rent today. Many landlords had been stalling negotiations hoping the government would step in.
Whilst the retails and leisure industry have been requesting payment holidays for the last few weeks, commercial landlords have been varied in their responses. Argent and Network Rail have reportedly offered businesses rent free periods, The Grosvenor Estate has offered to defer rents for three months with a potential rental holiday for more vulnerable tenants, but other landlords have said that they could not afford to take the hit.
Landlords are now calling for government support as whilst the retail sector has been the hardest hit so far, there will be far reaching consequences for the real estate industry if rents remain outstanding for a significant period of time.