British Land to halt rent concessions

British Land, one of the UK’s largest commercial landlords, has put tenants on notice that it will stop granting concessions on rent as coronavirus restrictions are lifted.

The company, which wiped more than £1bn from the stated value of its holdings in May as tenants were unable or unwilling to pay rent, said it was planning to take a firmer line as the “vast majority” of its customers were trading well.

The FTSE 100 company’s warning on rental concessions comes after the Treasury last month extended a ban on commercial evictions until March 2022, a move widely criticised in the property industry.

While British Land is receiving substantially more rent than it did when the public was told to stay at home, figures on Tuesday showed that almost £8m of the £43m due from its retail tenants in the most recent quarter remained outstanding.

British Land, whose retail portfolio includes Sheffield’s Meadowhall, Glasgow Fort and Ealing Broadway in London, said on Tuesday that it had made “pragmatic and equitable” arrangements for struggling businesses during the pandemic.

Some tenants have paid monthly rather than quarterly to ease pressure on cash flows, while in other cases British Land waived rental demands entirely.

However, the company said: “With trading restrictions substantially lifted and the vast majority of our customers trading well and paying the rent due, we do not expect to make further concessions this quarter.”

Ministers in June extended the eviction ban on commercial properties by nine months to give businesses hit hard by the crisis more breathing room to recover.

Retailers and the hospitality sector welcomed the decision, but landlords complained it would give cover to healthy companies to refuse to pay rent or extract other concessions.

The figures from British Land on Tuesday showed that it had received in full 71 per cent of the rent due from retailers for the June quarter. Tenants in the sector were paying 11 per cent of the sums owed on a monthly basis, while 18 per cent was outstanding.

Office tenants, in contrast, had paid almost all the rent they owed.

As of 11 working days after the quarter ended, the company had collected 85 per cent of the total rent due across both sectors, compared with 76 per cent in the previous quarter.

Foot traffic at British Land’s retail properties has picked up since coronavirus restrictions have been relaxed, although enclosed malls have been less popular than open air sites.

Footfall at British Land’s shopping centres between May 17 and July 3 was 75 per cent of 2019 levels, compared with 96 per cent at outdoor retail parks.

Simon Carter, chief executive, said in a statement: “With lockdown restrictions lifting, we have seen a notable improvement in activity across our markets and our business is performing well.”