Intu won't give in to rent reduction requests
Requests from successful retailers for rent reductions could fall on deaf ears, at least as far as shopping malls giant Intu is concerned. The CEO of the company said it wouldn’t bow to pressure to cut rents as thriving businesses seek to level the playing field.
A number of struggling retailers have gone into administration or have filed company voluntary arrangements (CVAs) and this has allowed them to exit some leases early and also to strike deals for lower rents. In some cases, these deals have seen rent payments being waived completely for a period of time.
This has led rivals, including Primark and Next among others, to say they would seek to renegotiate rents on properties where stores nearby have seen cuts.
But Intu chief Matthew Roberts said the company is “not in the business of discounting our space” and will only talk about rents at the start or end of a lease.
Intu itself is under huge pressure, as are its rivals such as Hammerson and Westfield, with net rental income and the value of property portfolios declining due to the spate of CVAs and higher vacancy rates.
Retail Week quoted Roberts saying he’ll meet with Primark over the next few weeks with the retailer “doing very good business” on Intu’s sites.
“I have seen Primark’s peers and they all have contacts with us,” he said. “None of them are able to rip up that contract at will and start again, and the likes of Primark we are doing very good business with. There is no short-term pressure to rip up leases and start again.”
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