Given that many gyms, leisure centres and studios have been ordered to close across much of Europe (there are a few exceptions), I am trying to get a sense for how property landlords are responding to the payment of rent, both now and over the coming months.
Here in the UK, I am reading that landlords across the wider leisure and hospitality industry are responding differently; some insisting on rent by the due date while others are taking a longer-term view and offering a rent holiday or deferring payment for perhaps an initial three-month period. The view, I assume, of many landlords is that they want to see their tenant businesses come safely through COVID-19 rather than see viable leisure operators close permanently and risk empty buildings.
Savills UK reports the following: “In terms of rent, requests range from rent holidays/deferments for a typical period of three months, a move to monthly rents and/or adoption of turnover rents for the period of the crisis. In terms of service charge, retailers are typically asking landlords for this to be kept to a minimum and paid on a monthly basis.
Landlords are largely dealing with occupier requests on a case-by-case basis. Typically seeing landlords agree to a three-month rent deferment to be repaid within the next 9–18 months or over the remainder of the lease. There is also a common trend of allowing a move to monthly rents. For those landlords that cannot afford rent concessions, there is a willingness to move to monthly rents with a reduced service charge.”
In the UK, the Coronavirus Bill is going through Parliament which means no business will be forced out of their premises if they miss a payment in the next three months. Further information can be read here.
Are you able to share your experience of exploring different solutions with your landlord which work for both parties? I am mindful that landlords also have their own financial commitments to make. I appreciate that this is a commercially sensitive area so just general observations about landlord sentiment/attitude would be appreciated. Please leave a comment or use the contact form.