Shorter and more flexible leases on shops are likely to become the norm while some stores may even be turned into homes as a result of the coronavirus pandemic, a leading property lawyer has said.
Research suggests only a third of rents due in the retail and leisure sector were actually paid in March and that things were looking just as bleak for June.
Now Clare Regan, Partner and Head of Commercial Property at Midlands law firm mfg Solicitors, said the entire rental market up and down the high streets could be about to change.
“Change has been coming in retail but it’s estimated the pandemic and subsequent lockdown has accelerated that change by as much as five years. Savvy occupiers will increasingly be using an internet platform coupled with a smaller property footprint to sell their goods. They will be looking for regular break rights in their leases if trade falls and rent suspensions if they can’t trade at all,” she said.
“It is possible that high streets and business parks may be able to adapt better than big shopping centres, which have some very high overheads and are less flexible in the way they can be used.
“Owners may need to think creatively about alternative uses for their buildings; looking at residential, industrial or even retirement living depending on the property.”
Ms Regan said it was premature to talk about the end of the high street but that some types of shops that were already in decline, such as fashion chains, may disappear quicker as even more people have got used to buying online while staying at home.
She added: “Property owners need to have a dialogue with their occupiers and look to come up with the best way to help them stay in business and keep them paying rent.
“There will still be a high street to go back to when the lockdown ends, but it’s not going to be the same as the one we last saw before the world changed in March.”
For advice on commercial property matters readers can contact Clare through firstname.lastname@example.org or by visiting www.mfgsolicitors.com