According to research, retail rent arrears could total over £2 billion following the third-quarter payment deadline this week.
Currently, this year has seen £1.5 billion in unpaid retail rent bills. Due to the ongoing effect of coronavirus on the high street, it is estimated that less than 50 per cent of rent due will be paid by operators.
In mid-September, the Government extended the moratorium on commercial property tenant evictions for non-payment of rent until the end of 2020, as the retail sector encountered difficulties post-lockdown.
However, many believed this would add stress on retail property companies, due to not receiving protection during the period after Christmas, which is usually a peak period for retailer insolvencies.
Recent figures suggest that retail footfall on high streets decreased to 28 per cent (year-on-year) last week. Moreover, following the beginning of the new 10 pm curfew for the hospitality sector, footfall has declined by 6.8 per cent.
Other new measures from the Government, are as follows:
- Customers need to wear a face mask in venues, when necessary, from 18 September and hospitality staff will need to remind them of this.
- Venues need to ensure customers are not meeting in groups of more than six, and that there is sufficient social distancing space between tables.
- Businesses are obliged to take the necessary contact details from their employees, visitors and customers – they can refuse entry to customers if they believe the information is inaccurate.
- Businesses need to display the official NHS QR code posters.
Any of these could have also contributed to the declining footfall.
Some retail leaders are now calling upon the Government to cancel this moratorium as it fuels the “confidence of the well-heeled to continue exploitation of a system designed to protect businesses in genuine distress”.
However, some experts believe this extension would allow tenants more ability to negotiate retail rents with their landlords.