Property owners are poised to take a more hard-nosed approach to retail CVAs.
Property companies Legal & General and Westfield are among landlords unhappy with plans by House of Fraser to undertake a CVA, The Sunday Times reported
They are considering options such as demanding an equity stake in return for concessions, or a cut of profits. They want to see detailed financial forecasts for the retailer.
Begbies Traynor and JLL are advising the property giants. A CVA could be blocked if more than a quarter of landlords oppose the proposed terms.
Begbies Traynor partner Mark Fry said: “Landlords represent pension funds, investment funds – they’re spending the ordinary man in the street’s money. So when rents aren’t paid, that affects the performance of these funds. It’s not just about rich property owners.”
Revo, which represents retail property companies, has written to the Commons’ Housing, Communities and Local Government Select Committee warning about CVAs.
Revo told committee chair Clive Betts that financial advisers were to blame for recommending the use of CVAs, and flagged “grave concerns about the advice being given to parties seeking to enter into such arrangements”.
Betts replied that he would look into anything that “could lead to a proliferation of empty shops and a general look of dereliction on high streets up and down the country”.