Retail rent arrears could exceed £2bn after today’s third quarter payment deadline, property industry body Revo has warned.
The organisation said this morning that less than 50 per cent of rent due is expected to be paid by operators as the coronavirus crisis continues to impact the high street.
So far this year the unpaid retail rent bill has reached £1.5bn.
Revo called on the government to cancel its moratorium on commercial property evictions, saying the extension has “fuelled the confidence of the well-heeled to continue exploitation of a system designed to protect businesses in genuine distress”.
Earlier this month the government extended the moratorium until the end of this year as the retail sector struggled to bounce back from the coronavirus lockdown.
The latest figures published yesterday showed that retail footfall last week was down 28 per cent year-on-year.
Meanwhile, footfall dipped 6.8 per cent across high streets compared to the previous week following the introduction of a 10pm curfew on bars and restaurants.
Revo chief executive Vivienne King said: “There is little justice in singling out property owners as the fall guys to indiscriminately compensate large and valuable operators for their cash flow.
“But having done so, the repercussions will reverberate through the economy for years to come as the capital for regeneration dries up, investors look to safer havens elsewhere and anyone who has put their savings into retail property faces huge losses”.
However, other experts said the extension would give tenants more power to negotiate retail rents with landlords.
EY strategic retail adviser Martin Carr said: “Ultimately deals will be done that more accurately reflect the new world of decreased footfall, increased online shopping and an inability of retailers to pay the existing rent costs.
“If this doesn’t happen across the virtual negotiating table, it will happen through many more company failures”.