Given that the landlord yesterday announced it is selling half of Meadowhall in what’s been dubbed a “cut-price sale”, it is fairly safe to guess that Thursday’s results won’t be too good.
But they’re not alone. A year ago, despite the fact that the value of its portfolio was already dropping, the news that Hammerson was calling for a£584 million rights issue would nonetheless have scarcely been conceivable.
In both cases retailers need to keep a watchful eye. The fact that British Land valued Meadowhall at 16 per cent lower than the figure it gave only three months ago is a sobering reminder of how quickly things have declined.
The only plus side is that with values falling so seriously, rents aren’t likely to move much this year – but with landlords in straits as dire as these, they won’t be in the mood to make many concessions like monthly rents, at least without financial penalties to compensate.
British Land’s figures won’t be the only results being carefully watched on Thursday because it’s also when the crucial CVA vote by landlords and suppliers to Stylo is being held.
The outcome, it seems at this point, is still very much in the balance. On the one hand it’s been suggested that landlords would be daft to agree to the terms and that by doing so they would set a dangerous precedent.
But talk to someone else and you will be told that the vote must go through.
In answer to the former – we know that landlords don’t like making decisions at gunpoint, but if you look at the two alternatives – (1) the collapse of Barratts and Priceless (2) the dreaded pre-pack – is it such a difficult choice?
It is worth pointing out, however Thursday’s vote goes, that Stylo has acted with a frankness distinctly lacking in other retailers in not plucking out the pre-pack card and for holding such above-board discussions with their landlords.
This has to count for something.
Whatever happens on Thursday – to Stylo or British Land – this will have been yet another week that proves why property is a critical part of the retail game.