British Land et al
Posted: July 30th, 2020, 11:24 am
I notice in the Times this morning that Legal & General, which is quite a big property investor, 'has overhauled its leasing model' It is 'moving away from long term leases with upward only rent reviews to offer more flexible terms focused on rents linked to store performance'.
Fundamentally, the rent will be linked to the turnover of the business, the idea being that the risk and rewards are then more evenly shared. That will presumably help to avoid the stand offs we have seen in recent times but if bigger landlords like British Land and Land Securities have to follow suit I wonder how that will affect them?
Apparently this model is common elsewhere (in the US, France and Germany for instance) and I have seen it working for myself in Hong Kong. It is then in the landlord's direct interests to keep shopping malls attractive for shoppers and they very much want to increase the footfall so they are much more into 'managing' the mall and the tenants than is probably the current case where they can be in conflict with the tenants where they are simply rent collectors.
Dod
Fundamentally, the rent will be linked to the turnover of the business, the idea being that the risk and rewards are then more evenly shared. That will presumably help to avoid the stand offs we have seen in recent times but if bigger landlords like British Land and Land Securities have to follow suit I wonder how that will affect them?
Apparently this model is common elsewhere (in the US, France and Germany for instance) and I have seen it working for myself in Hong Kong. It is then in the landlord's direct interests to keep shopping malls attractive for shoppers and they very much want to increase the footfall so they are much more into 'managing' the mall and the tenants than is probably the current case where they can be in conflict with the tenants where they are simply rent collectors.
Dod