Landlord Land Securities has said it no longer plans to offer retail tenants concessions in its properties amid signs of increasing demand for space, leading some to claim that landlords are back in the driving seat at the negotiation table.
Land Securities chief executive Francis Salway told The Times: “The downturn has been tough on property companies and on retailers. There are instances of retailers still asking for concessions, and it can be in our interests to show flexibility in specific areas, and we have led on a number of such initiatives. However, we do not believe across-the-board changes to agreed contracts are appropriate.”
The revelation came as Land Securities revealed it was offering a new lease that does not penalise tenants for paying monthly instead of quarterly, according to The Times. It intends to roll it out to its entire portfolio.
Argos and O2 are the first to sign up to the new Clearlet lease, which will see the landlord scrapping the 1 per cent premium on monthly payments.
However Salway told Retail Week that conditions in the market remain challenging, and that while in the strongest shopping centres there might now be competition for units, generally speaking many location retained an overhang of space.
Both British Land and Hammerson have also noted an increase in demand for properties from retailers, the Times article claimed.
A spokesman for British Land said: “It is a question of who has the upper hand, and where there is good demand from tenants and low vacancy rates, landlords do not need to give more.”