Retail landlords to cut costs
By Andrea Felsted,Retail Correspondent
Published: April 5 2009 19:58 | Last updated: April 5 2009 19:58
Some of Britain’s biggest landlords have agreed a plan to cut costs by up to 20 per cent and pass these savings on to retailers in the latest move to ease the beleaguered high street’s burden from property costs.
The British Property Federation said some of its biggest landlord members had agreed a 10-point plan to become more efficient in the provision of miscellaneous services and to pass these savings on to retailers in the form of lower charges.
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Development Securities seeks £1bn - Apr-01Property market exposure hurts Davenham - Mar-26Derwent London’s net asset value suffers - Mar-17Shard aims for the sky amid office sector woes - Mar-16Sir Philip Green, who last year led calls for a reform of the system of quarterly rent bills, welcomed the move. “Where costs can be reduced, it is going to be beneficial to both the retailers and the landlords.”
The British Property Federation said a pilot project at four shopping centres looked at ways to generate savings through a range of measures from temporary initiatives to improving processes and landlords and retailers identifying changes to services requirements. The result was projected savings of 10-20 per cent at the centres.
Sir Philip’s Arcadia retail group is one of the retailers that has been involved in the pilot scheme. The others include Phil Wrigley, New Look executive chairman; Andrew Varley, Next’s property director; and David Tudor-Morgan, British Land director of retail property management.
The 10-point plan extends the pilot to other shopping centres and will seek to generate savings in areas such as cleaning, waste management, security, administration, maintenance, utilities, customer services and marketing.
Mr Varley said: “What we are trying to do is get more transparency for retailers. Why do we need to pay 10 per cent managing agents’ fees, for example? It is about drilling down to find out why certain costs are so high at certain centres. We would like every landlord to look at this.”
The latest accord between landlords and retailers comes after the stand-off over quarterly rents. Landlords are now generally willing to talk about granting monthly rents, having been combative over existing lease terms.
Service charges have proved another flashpoint as the economy has worsened, with some retailers refusing to pay part of their service charge to Westfield.
Westfield is one of the landlords that has signed up to the 10-point plan alongside British Land, Capital & Regional, Capital Shopping Centres, Land Securities, Legal & General and Prupim. |
