Frasers and Boots frustrate landlords with hardball rent talks

Mike Ashley’s retail chain Frasers Group and the chemist Boots are among a small group of tenants yet to strike a peace deal on unpaid rents, according to landlords. 

Polling by the British Property Federation showed a large majority of landlords and tenants had reached agreement on what to do about the roughly £6bn in rent debt built up during the pandemic. 

But landlords have been frustrated, according to the BPF, by an aggressive minority of tenants who refuse to engage or reach a compromise.

Frasers and Boots are two of the big chains still playing hardball with landlords, according to people with knowledge of the negotiations.

“Well-capitalised businesses continue to exploit the moratoriums and pay no rent at the expense of the local authorities, pensions and savings funds that own the high street. Government must take action now, when most businesses are open and trading, to end this scandal,” said Melanie Leech, chief executive of the BPF.

Tensions between landlords and tenants have emerged in recent weeks as the government prepares to roll back protections for shops, restaurants and leisure businesses on June 30. 

Ministers have said they will lift bans on landlords evicting commercial tenants and pursuing them for unpaid rent accrued during the pandemic. The bans have been in place since March 2020. 

But they are yet to decide with what to replace the protections. The expectation in the property sector is that guidance will come within the next week, once a decision has been made on whether to further ease coronavirus restrictions on June 21 or to extend existing measures. 

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Tenants are desperate to return to business as usual after more than a year of coronavirus weighing on trade. But over the past 15 months many have built up considerable rent debt and anxiety is felt that, if pressed into repaying too quickly, they could go bust. 

The British Retail Consortium said in May that two-thirds of retailers in the UK were at risk of legal action on at least one of their stores once the bans are lifted.

But the BPF has hit back, claiming that most landlords have acted in good faith and cut deals with tenants. 

The BPF studied more than 16,000 retail, hospitality and leisure property leases across the UK, and found that agreements — including new payment plans, waivers, rent holidays and deferrals — had been agreed on more than three quarters of them.

Holdouts represented a relatively thin proportion of tenants, roughly one in seven, owing an estimated £1.84bn in unpaid rent, according to the BPF. 

Boots said it had “stayed open throughout the pandemic to provide pharmacy services for the patients who need us, but retail footfall across our estate has been reduced and trading has been impacted.

“We have reached agreements and are paying rent to the vast majority of our landlords. Discussions remain ongoing with a small minority as we look to agree fair and equitable solutions to allow us to continue to serve our local communities, including providing vital pharmacy services.”

Frasers did not respond to a request for comment.

Peter Bell, chief executive of the Commercial Tenants Association, said “there are a very small number of tenants not playing ball [and] the reality in practice is that landlords are not always sitting down with tenants either.” 

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He said that hopes for businesses to be trading “as normal” and being able to pay full rent from June 21 were “farcical”.



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