Britain’s high street seeks government rent support – Metro US

Britain’s high street seeks government rent support

FILE PHOTO: The spread of coronavirus disease (COVID-19) in Hemel
FILE PHOTO: The spread of coronavirus disease (COVID-19) in Hemel Hempstead

(Reuters) – Britain’s commercial tenants and landlords have the asked the government for rental support, saying the coronavirus pandemic makes it impossible for thousands of retailers to pay their rents.

The scale of the crisis facing the retail sector is grave and businesses are now at risk of administration due to the impact of the virus, trade bodies British Retail Consortium and British Property Federation wrote in a letter to the government on Friday.

The letter proposed a Furloughed Space Grant Scheme (FSGS) that would mirror similar schemes being introduced in other European countries, with the state supporting the fixed costs of businesses that have experienced dramatic falls in turnover due to the coronavirus outbreak.

While sales may have increased in certain sectors such as food retailing and household items, these are temporary and the majority of business are experiencing dramatic falls in turnover of up to 100%, the trade bodies wrote.

British retail property owners and tenants are becoming increasingly weary as they work together to defer rent payments and find other ways for shops, businesses and landlords to cope with a countrywide shutdown due to the coronavirus pandemic.

Mall operator Intu <INTUP.L> said last month it received only 29% of rent in the March quarter and requested its banks to waive its borrowing terms.

“Unless further action is taken, we will see many otherwise viable companies file for administration, with the consequent loss of jobs, devastating impact on communities and high streets, and increased cost burden on public funds, not to mention threats to the income generation for pension funds, amongst others”, the letter said.

The government has already taken steps to prevent hardships for retailers, by passing a law last month to prevent landlords from evicting commercial tenants who cannot pay rents.

Department store chain Debenhams and fashion brands Oasis and Warehouse are among the well-known British high street businesses to have fallen into financial difficulties in the past couple of weeks due to inability to pay rent for the period during the lockdown.

Separately, the BRC said on Monday that the number of British people leaving their homes to go shopping has slumped by 83% since the government closed non-essential retail outlets last month to slow the spread of COVID-19.

(Reporting by Samantha Machado in Bengaluru; Editing by Supriya Kurane)