UK landlords have teamed together to agree a 10-point plan that could cut the costs of their retail tenants by as much as 20 percent to help them through the economic downturn.
The British Property Federation said landlords such as Prupim, the property arm of Prudential insurance company, British Land, Capital & Regional, Westfield and Legal & General had signed up to the plan, which could see landlords defer maintenance projects and introduce other cost saving measures in a bid to help retailers.
Last summer, retailers joined forces to demand rent was paid monthly in advance rather than quarterly in advance because of the impact it was having on their cash-flows.
Some of Britain’s biggest High Street names joined the campaign, including Boots, Next, Argos, Arcadia, BHS, New Look, Carpetright, Carphone Warehouse, DSG and Debenhams.
Today, the BPF said pilot projects at four shopping centres across the UK had seen savings of as much as 20 percent passed onto retailers. British Land is projecting savings of up to 20 percent for its Meadowhall centre in Sheffield, while Prupim is expecting an 11 percent saving at its Cribbs Causeway centre, The Mall, located near Bristol.
According to a statement, the 10-point plan will see landlords look to cut costs in relation to the hours of operation of centres, cleaning, security, administration and utilities costs and in some cases deferred maintenance projects for a short-period of time.
Liz Peace, chief executive of the BPF, said: “While the property industry has been as badly hit by the downturn as retailers, we are obviously keen to help our tenants survive and are prepared to work with them to improve efficiency, cut costs and do whatever we can to make sure that both sides of the business can get through these challenging times.”
The plan has also been backed by retailers, including Andrew Varley, the property director of fashion store, Next. “What we are trying to do is get more transparency for retailers. Why do we need to pay 10% managing agents’ fees, for example? It is about drilling down to find out why certain costs are so high at certain centres. We would like every landlord to look at this,” he said.