General

Turnover rents have been adopted by retail landlords as part of the solution to protect beleaguered retailers and leisure occupiers as they grapple with twin headwinds from the pandemic-induced recession and broader market forces driving structural change.

Major retail and leisure landlords are embracing turnover-based leases for tenants in a tacit acknowledgement that the UK’s leasing framework is not fit for purpose.

Retail landlords are at the frontline of the economic crisis triggered by the Covid-19 pandemic within the real estate sector. Many variables will influence how landlords, and retailers, will fare in the months and quarters ahead.

Retail landlords’ rates of rent collection have emerged as a proxy for solvency status across the broader retail and leisure sectors. Disrupted business activities for those retailers reliant on traditional bricks and mortar footfall is severely denting their ability to make rental payments.

The UK economy is braced for a record double-digit contraction in economic activity for the second quarter, with the economy expected to be worse affected than many of its European neighbours and possibly even the US. A subtle combination of Britain’s distinct economic structure and cultural factors account for the UK’s relative economic weakness.

Europe’s leaders have concluded four days of tortuous negotiations in Brussels to unite behind a historic coronavirus recovery fund which binds the bloc into a tighter fiscal union.