Landlords' rent concessions may be the difference between survival and demise for some retailers

Administrations are now a sad fact of life.

While the Christmas sales figures are only just beginning to emerge from the ether, all the indications are that the so-called festive season was worryingly bad, and already we have seen the end of a handful of unfortunates in 2009.

With retailers biting the dust on a daily basis the implications for the property industry are fast becoming apparent.

Two categories of retailers are emerging, and as is so often the case, the telling sign is what the big players are doing property-wise.

Broadly speaking, those that are strong are looking to take on more space, those that are sadly in their final throes are disposing on a big scale.

We already know that there will be another 111 stores to fill now that Adams has been placed into administration, and are just waiting to see how many more will be left empty by further collapses.

But on the plus side, think for a minute how quickly shrewd retailers were to take hold of the stores left empty by Woolworths.

Within days of the news of Woolworths going to the wall, property sources were telling me that the interest in the stores had been phenomenal and had come from all sectors within the industry.

The problem is that, while there are these stronger players hungry for space, there is only a finite amount of demand even with oversees retailers waiting to pounce.

It’s a sobering thought, but if retailers falling into administration continues at the current rate, there could be far more space than even the hungriest of retailers can take up.

Just today research published by Experian suggests that by the time the year is out retail voids could reach record proportions of 15 per cent, which in real terms woud mean some 135,000 empty stores.

But for those that are caught between the luxury of being able to expand cheaply and the nightmare of administrations and disposals, there is a third way.

Reports emerged over the weekend that Prupim was considering rent concessions and service charge wavers as means of keeping those struggling above water.

Exactly how this will translate into reality remains to be seen, but the Pru will by no means be the only landlord considering giving retailers a break. And quite right, too.

For those in this last category, it may be the difference between survival and demise.

With the weeks to March quarter date likely to fly by retailers should be asking for as much in the way of relief as they can, and landlords should be as flexible as possible for everyone’s good.