Emailed in by SG, from The Guardian:
High street landlords are gearing up for war with retailers, whom they accuse of railroading them into agreeing to rent cuts via increasingly controversial company voluntary arrangements (CVAs).
Struggling businesses including the department store chain House of Fraser, the children’s retailer Mothercare and the Carluccio’s Italian restaurant chain are all seeking CVAs, where property owners accept lower rents to help a tenant avoid financial collapse.
Good, as the alternative is the parasite killing the host. Nice to see that retailers have woken up to the fact that they pay a lot more in rent than they do in Business Rates; there's no point whining about the latter if you can do something about the former.
But we've covered that point before, here's the classic bit of Home-Owner-Ist one-sided economics:
Begbies Traynor partner Mark Fry said: “Landlords represent pension funds, investment funds – they’re spending the ordinary man in the street’s money. So when rents aren’t paid, that affects the performance of these funds. It’s not just about rich property owners.”
That cuts both ways.,,
Begbies Traynor partner Mark Fry said: “Shares in retailers are owned by pension funds, investment funds – landlords are taking the the ordinary man in the street’s money. So when high rents are enforced, that affects the performance of these funds. It’s not just about rich business owners.”
Fact is, if pension funds own the right mix of retailers and land-and-buildings, they couldn't really care less how this pans out. In fact, it is better to err on the safe side, which is lower rents and higher returns from their retail investments, than it is to wipe out the value of their retail investments by trying to enforce high rents, and then ending up just owning a load of empty buildings.