The UK retail sector is evolving rapidly – for example the way in which consumers shop, the influence of online shopping and often quoted struggle between “bricks and clicks” as well as the changing nature of the high street and the wider retail environment are all affecting the use, financial viability and location of pure retail assets.
Forsters advises a range of clients who own, invest or develop real estate assets within the retail and leisure sectors and we have an extensive track record of advising these clients, particularly on large-scale and complex mixed-use developments incorporating residential, leisure and restaurant elements.
Our lawyers are extremely experienced in advising shopping centre owners and operators, acting as principal advisor on a number of significant shopping centre schemes across the country.
The team at Forsters is uniquely placed to advise on alternative rental structures, having been involved in drafting and negotiating turnover rent leases through various economic cycles. The greater sense of collaboration and sharing of risk and reward between landowner and its occupier customers brought about since the onset of COVID-19 has seen turnover rents become front pages news once again and the experience of the team built up over the decades is market leading and we aim to demystify the process with a practical hands on approach.
Our cohesive approach enables us to draw on a variety of skill sets to progress schemes from the planning stage right through to negotiating leases with anchor tenants or in the case of owner occupiers, operating. The comprehensive commercial and pragmatic advice we deliver to our clients provides a solid foundation to their overall investment strategy and approach.
We have the ability to call upon colleagues from other departments within Forsters and regularly work alongside teams from Tax, Planning, Construction, Dispute Resolution, Corporate Finance and Corporate all of whom have extensive experience of advising on real estate specific matters in their respective fields.
Commercial Real Estate Partner, Andrew Denye is now a member of the NLA Expert Panel for the Retail & Hospitality programme.
In an effort to mitigate the economic impact of the Covid-19 pandemic while still seeking to limit the spread of the virus, the Government has announced that most non-essential shops, department stores and shopping centres will be allowed to reopen in June 2020.
The restrictions on movement imposed by the Government, in its attempt to control the spread of coronavirus, have exacerbated the already difficult trading conditions in which many retailers find themselves. Recent days have seen the sad news that both Debenhams and Cath Kidston have filed notice to appoint administrators. It can be expected that others will follow.
Note for landlords of commercial properties- particular points re rent recovery from tenants in current market conditions
Many tenants (particular those in the retail and hospitality sectors- but also a considerable number of office and industrial tenants) are not paying their rent in full or, in many cases, at all. Some of these tenants are major companies (such as JD Sports and WH Smith) who one would think could afford to pay. According to press reports, only 48% of commercial rents had been paid for the March 2020 quarter by the start of April.