Rent deadline doesn't have to be doomsday if we all work together - The Times
With the deadline for the end of the current moratorium fast approaching, our Chief Executive, Mark Allan, joined the Chief Executive of British Land, Simon Carter, to speak to The Times about our proposed solution. Here's their piece:
Whether the government progresses with unlocking on June 21 or shortly after, we can take comfort that there are strong indicators that the economy is getting back on track.
At each stage of the “road map”, the great British public has demonstrated its desire to get back to experiencing life. Consumer confidence is returning on the back of record levels of household savings, with people spending more of their disposable income on the things they love.
Having already seen retail bounce back, it was wonderful to see restaurants enjoying a 75 per cent rise in seated diners, compared with 2019, on the Saturday after indoor hospitality reopened. Smaller businesses, in particular, stand to benefit from these trends as spending priorities change and as more people shop and eat out locally.
This is clearly giving cause for confidence, with job postings in the leisure, tourism and hospitality sectors rising by 52 per cent in the month immediately preceding May 17 and continuing to tick up each week.
Despite this optimism, our sectors still need to resolve the issue of how to withdraw the moratorium on enforcement action and manage the accrued rent arrears. The moratorium is scheduled to end on June 30, but several options remain on the table to support its withdrawal.
Many readers will have seen lobbying from all sides — landlords, retailers and hospitality businesses — giving the impression that we are very divided on this issue. The reality is that all parties have far more in common, not only in terms of our long-term interests but also in how to bring the moratorium to an end.
The idea that our long-term interests are so aligned was what motivated Landsec and British Land, in partnership with the British Property Federation, to put forward our own proposal to withdraw the moratorium. We want to work collaboratively with government, our peers and partners in retail and hospitality to get the country back on track post-pandemic. That has to mean landlords and occupiers working constructively together, as economic partners, to resolve this situation. The pandemic has affected all our businesses and we each have a role to play in recovering from it.
A solution is within reach. Our proposal is built on three principles on which we believe there is broad consensus.
The first is ring-fencing pre-June 2021 arrears, but lifting the moratorium for rents incurred from June onwards. The second is owners and occupiers using the ring-fence period (we suggest six months) to negotiate and agree how to resolve arrears, using an enhanced code of practice as a guideline, with the ability for payments to be deferred beyond this period where there is agreement between the parties. These measures should enable government to get the market back to normal operation while continuing to support those businesses that need it.
The third and final element is a defined backstop of binding arbitration, to encourage all parties to negotiate constructively and in good faith.
We are convinced that a solution to the commercial property moratoriums and accrued rent arrears is within reach — a solution that would enable the market to return to normal operations from the end of June while still protecting those businesses that have been significantly affected by the pandemic.
By focusing on the things that unite us as businesses, rather than divide us, we can turbocharge the UK’s recovery from the pandemic — creating even more jobs and unlocking investment in our high streets.
Mark Allan chief executive of Landsec and Simon Carter is chief executive of British Land