Retail Tenants Turning to Monthly Rental Payment Option

monthly rental payment optionThere has been much in the press detailing the plight of high street retail property and the struggles in relation to the historical norm for paying rent quarterly in advance.

Trading from a prime retail property is expensive.  Rent is however only one aspect and often the rates appear to be excessively high and particularly in shopping centres there is the service charge element to consider.  However, do monthly rent payments solve the solution?  Recent reports from the retail property market point to several famous retailers which have prime retail propertybegun the negotiations with their landlord to pay the rent every month despite the fact that when the leases were agreed it is agreed that the rent will be paid 3 months in advance.  Many retail property owners are looking into these requests as they see some advantages behind it – perhaps credibility and the cash flow problems of the tenant and, to some degree if they fail to pay, the owners may see it coming quicker and can deal with it accordingly.

The question often put to us is why pay in advance?  Without seeming cynical, if rents were recovered in arrears, would it make any difference?

The same can be said for all other forms of commercial property.  Whether it is offices in Peterborough, industrial units in Huntingdon  or retail property in Cambridge, the rent payment trend is changing in the UK.

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