Retail landlords must be getting seriously scared. Last week the British Property Federation played the "poor pensioner" card, when commenting on the collapse of Allied Carpets, which had "non-cancellable" lease obligations of £36m in 2008.
There is of course a link between the falling value of property held by pension funds and the amount they pay senior citizens. But given that most funds hold no more than 10% in real estate, that link is not strong.
BPF members may be less worried about the elderly than they are about the level at which retail rents will settle in the longer term.
As the world knows, landlords are offering short term leases at way below market rents to distressed retailers. They comfort themselves with the expectation that when the current maelstrom blows out, rents will return to "market" levels.
But not-quite-distressed retailers are currently paying four or five times as much as their poor next door neighbours. Do landlords seriously expect the big retail chains, now gamely paying up, to ignore this evidence at lease renewal?
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