Commercial rent arrears are close to £3billion right now.
Let that sink in…
As the commercial rent moratorium, set to expire at the end of March, is reviewed by Ministers, commercial tenants in the hospitality sector look on nervously.
Commercial landlords too, look on with trepidation, as to whether or not they’ll find themselves any closer to either recovering what is owed to them, or to starting their mission to find new tenants.
It’s hard to say which task is the least desirable. Toss of a coin?
From the tenants’ perspective, getting started again provides a faint sense of optimism, but without Government and big bank assistance or support, that optimism is heavily tempered with the lingering debt that has been accruing for a year or so.
It’s a rope around the neck of many businesses, even before they open up again.
Rent arrears are at an all-time high in the commercial sector, but evictions and forfeitures are still currently banned, meaning that it’s a stale mate on a huge scale.
Stakeholders on all sides of the argument look likely to have to take at least a share of the pain.
The interim report from the Business, Energy and Industrial Strategy (BEIS) Committee has been urging Chancellor Rishi Sunak to look at providing more targeted support packages to the industries most in need, including hospitality.
Those within the industry itself have also been making themselves heard, saying that businesses cannot be expected to have to account for a full year’s rent, when they have been legally prevented from trading for much of that year.
We hear that, but we also know that landlords still have their costs to cover, which is why Government support, and targeted support at that, is needed quickly.
From what we’re hearing, those on all sides of the arrangement are prepared to shoulder their share of the struggle (as they already have been doing for a year now) but unless official arrangements are made for those same people to see some kind of financial reprieve or backing, we’re likely to see either a race to evict tenants, or an industry fighting a losing battle to recover, whilst settling rent arrears.
Rishi Sunak said he’d do ‘everything it takes’ about a year ago.
Things have changed since then, but it looks like the hospitality sector at least, will be holding him to it.