2021 looks set to bring mixed fortunes for retailers and landlords as the retail sector faces up to more challenges caused by the ongoing COVID-19 crisis, according to commercial property consultancy Burley Browne.
The Sutton Coldfield-based Chartered Surveyors are specialists in negotiating rent reviews, lease renewals and lease restructuring across the UK, and the firm believes that many landlords will have to embrace a “flexible approach” if they want to retain tenants who may seek to renegotiate their leases.
Joint Managing Director James Merrick said: “It’s pretty clear that 2021 is going to be a difficult year for many businesses operating in the retail sector. However, it’s not all doom and gloom, as many would have you believe.
“Our message to landlords is to be flexible and there are deals to be done. Flexibility can help deals go through easier. It could be a case of taking short-term pain for long term gain in order to maintain asset value.”
As one of the West Midlands’ leading independent commercial property consultants, Burley Browne has found that despite a lot of tenants being tempted to go on flexible or turnover rents, there is little appetite from landlords.
James adds: “Demand for secondary retail property in good, solid locations, will continue to outstrip supply. But in typical high streets and shopping centres, it will be a tenant market. Positive, flexible landlords will be the ones keeping tenancies.
“Economic challenges have had a huge impact on the retail sector and retailers are now looking to restructure their leases. Sometimes it’s a case of restructuring or vacating. The more flexible landlords are often agreeing to short rent-free periods and lease flexibility, which is a trend we’re seeing now and believe will continue in 2021.”