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Call for change to rent structure

7:00am Thursday 24th July 2008


BRITAIN'S retail magnates are calling for commercial rent reforms which could help Dorset businesses manage their cashflow.

Arcadia owner Sir Philip Green and Lord Harris, chairman of Carpetright, are among those now calling for commercial landlords to accept rents monthly rather than quarterly in advance.

The British Retail Consortium (BRC) has estimated that quarterly rents in advance add £145m a year to retailers' costs.

BRC director general Stephen Robertson said: "The BRC has made significant progress in establishing monthly rents as the norm but today's tough trading conditions mean the impact of quarterly leases still out there is that much greater.

"At a time when retailers are battling a range of rising costs in order to keep shop prices and overall inflation down, the new momentum given to rents reform by some of UK retailing's key figures is welcome.

"Requiring rents three months in advance is at odds with standard business practice. It's a historic and costly practice, rooted in the days when communications were governed by the speed of a horse.

"So far this year a number of retailers have gone into administration. Seeing retailers driven to the wall is in no-one's interest.

"By agreeing to a fairer rents regime, landlords will be contributing to the retail prosperity on which they themselves depend."

The BRC has been campaigning for two years to change this practice and believes that monthly terms are becoming normal practice on new and re-signed leases.

For the remainder, toughening trading conditions are making the extra costs and cash flow difficulties of paying quarterly in advance more significant.


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