Cadogan, which owns
93 acres in London around Chelsea and Knightsbridge, will remove all base rents
and move to turnover rents until 2021. “Over the past few months, we have been
working closely with our hospitality businesses – over 30 restaurants, bars and
cafés – to remove all base rents and convert each to turnover-only rent until
2021,” Cadogan chief executive Hugh Seaborn told Property Week.
doing everything we can to encourage a safe and sustainable return for
businesses across the area. This extends the support package that we agreed and
announced earlier on this year and means our financial support for local
business has now extended to almost £15m.”
Howard de Walden Estate has also moved a number of hospitality occupiers to
turnover-based rent agreements for the next 12 months. “Prior to lockdown, we
were already reviewing our strategy for Marylebone Village to see how it could
best meet the needs of retail and leisure businesses,” said Rob Kirk, the
estate’s head of retail and leisure. “Since the pandemic hit, that process has
had to accelerate.
hospitality occupiers, we have agreed turnover-based rental agreements for the
next 12 months and we continue to discuss options with others. Throughout this
process, our key consideration has been to have an open dialogue with our
retail and leisure occupiers and we will continue to do so during the coming
months while we all work together to help Marylebone flourish.”
follow a similar switch to turnover-based rents by Shaftesbury, as reported
this week on PropertyWeek.com. Other major landlords including The Crown Estate
and Capital & Counties are also offering tenants the opportunity to link
lease terms to turnover to support businesses hit hard by the lockdown.
rents are not new. A number of landlords offer them including Quintain at its
London Designer Outlet and Wembley Park and Argent at King’s Cross.
beginning, some [rents] were based on base rent with some turnover, some were
pure turnover, others were just pay base rent,” said David Partridge, senior
partner of Argent and chairman of Argent Related, adding that turnover-based
rents had not been widely adopted because of the difficulty assessing turnover.
he predicted, more landlords would now switch despite the challenges posed. “I
think retail will move to turnover-based rent. The issue is how do you
calculate turnover?” he said.
is online and how much bricks-and-mortar? Do you count stuff where people have
visited the shop but ordered online or when they return it to the shop but
didn’t buy it there? That’s a tougher proposition for retailers and real estate
providers to get their heads around. We’ve tended to work on a definition of
what goes through the till. But that is changing.”