Intu has threatened to serve ’statutory demands’ to some tenants that have refused to pay their quarterly rent.
In a letter sent to tenants and seen by Property Week, intu warned that it would “take robust action where rent and service charge payments, contracted under lease obligations, are not paid”.
The letter stated: “We remain sympathetic to the situation and the difficulties our customers face, but we have our own binding responsibilities to our funders and investors, as you will understand.”
A statutory demand is a formal request that a debt must be paid. An individual or business that receives a statutory demand has 21 days to reach an agreement for payment.
Intu received just 29% of the rent that was due last week on rent quarter day, down from 77% at the same point last year. At the time, the shopping centre landlord said that as a result of the reduced rents it would probably need to seek covenant waivers from lenders.
The company noted that when the government introduced its temporary ban on evictions of commercial tenants, it would actively monitor the impact on landlords’ cashflow.
Asked about the letter, an intu spokesperson told Property Week: “We are happy to engage with brand customers on a case-by-case basis, but we have neither the desire nor financial capacity to bankroll global, well-capitalised brands that have just decided they don’t want to pay their rent.
“Our approach will be the same to any UK brands that behave in a similar way, not least because they are beneficiaries of significant financial support from the government. We have to take a tough line in these circumstances because we have a duty to protect our stakeholders including our 2,500 staff.”
Intu is just one landlord threatening legal action against retailers and hospitality businesses, many of which have withheld rent payments during the lockdown.
The Financial Times reported last weekend that Caffè Concerto had been sent a winding-up petition, which is a court order that forces an insolvent company into compulsory liquidation, from Criterion Capital, the owner of its Haymarket site, after it refused to pay a £100,000 rent bill.
Sykes Capital, the landowner for Vietnamese restaurant chain Pho and Escape Hunt’s Reading sites, also threatened to take action against businesses if they did not pay full rent for the next quarter.