UPDATE: On 23 March the government announced extra protection for businesses, with a ban on evictions for commercial tenants who miss rent payments.
These measures, included in the emergency Coronavirus Bill currently going through parliament, will mean no business will be forced out of their premises if they miss a payment in the next three months.
“We are protecting both people and their businesses by providing the urgent support they need,” comments communities secretary Rt Hon Robert Jenrick MP.
“We know many commercial landlords are already setting a great example by working closely with tenants and offering rent deferrals or holidays.
“However, these new measures will provide reassurance to businesses struggling with cashflows and ensure no commercial tenant is evicted if they cannot pay their rent because of coronavirus over the next three months.”
The amendment to the Coronavirus Bill on commercial leases will apply to all commercial tennants in England, Wales and Northern Ireland.
A government statement confirmed it will be working with the Devolved Administrations, including Scotland, across its coronavirus response.
The change will come into force when the Coronavirus Bill receives Royal Assent, lasting until 30 June, with an option for the government to extend if needed.
Earlier today (23 March) thousands of hospitality businesses across the UK were still reeling from the announcement made by prime minister Boris Johnson on 20 March that they were to close their doors for the foreseeable future in order to curb the infection rate of Covid-19.
The news was delivered alongside the new measures in place to support employers and retain employees as businesses are forced to adapt to the new trading environment and economic emergency as a result of the coronavirus spread.
Though the Coronavirus Job Retention Scheme was broadly welcomed by the industry, there were calls for further relief as upcoming quarterly rent bills loom and the threat of landlords taking charge of premises from businesses unable to pay becomes real.
“The new Job Retention Scheme is an extraordinary measure,” tweeted London Union and Street Feast founder Jonathan Downey.
“It’s an incredible attempt to keep millions of people on the payroll. It requires considerable risk-taking and support from businesses and boards. To ensure companies can step up they must have a lease.”
Though he notes that as of 23 March, in 48 hours’ time, ‘businesses won’t be able to pay their rent’.
“Will we look back at the £1bn+ of deferred rent payments and remember how all that money kept thousands of businesses alive so they could pay their people and save a million jobs?” he asks, as one of the industry figures calling for a six-month lease forfeiture moratorium.
“Or will it be tomorrow? It has to happen. I have no inside line on this but, without it, every other extraordinary measure taken by the government so far will be meaningless for so many.
“In hospitality alone, this is 250,000 premises – pubs, clubs, bars, cafes, restaurants, hotels – and more than £1bn of rent. It’s impossible to say how many jobs will be lost if we don’t get this announcement but it will be millions.”
Network Rail made an announcement on Friday 20 March of ‘swift and significant measures’ aimed at supporting retailers in Britain’s stations and small business tenants across its commercial estate, as trade continues to be severely impacted.
Network Rail cancelled all first quarter (25 March – 23 June 2020) rent payments due from tenants in their commercial estate portfolio with immediate effect, in a move that it hopes will provide ‘significant relief for small businesses who are worried about the impact of the virus on their footfall’.
Further to this, Network Rail will also cancel all base rent payments for retailers in its managed stations for the first quarter of the new financial year (April-June 2020).
“We work in partnership with retailers and tenants to provide positive experiences for passengers and communities,” comments David Biggs, managing director for Network Rail Property.
“In challenging times, it is important we step up to the plate and show our partners they are valued, and we are ready and willing to help. That is why we have taken this decisive action.
“We also understand more support may be required as this situation develops. We will continue to liaise with central government and will keep speaking with our retailers and tenants about how we can assist further.”
There have been calls for other landlords and the government to offer similar support to operators relying on trade to pay their rent.
“It is imperative that support is offered to those in the supply chain for these leisure and hospitality operations and also to the freeholders of the tens of thousands pubs, restaurants and other affected businesses across the UK which are leased and are dependent on rental income,” adds James Shorthouse Head of Alternative Markets at Colliers International.
“These companies really need assistance at this time to ensure the survival of the industry in the future.”