'Pound Shop' Taken to the Next Level.
The Financial Times reported today that some retailers have been offered absurdly cheap annual rents in order for landlords to avoid paying business rents on "un-lettable" high street units, with Dixons, Clinton Cards and charity shops among the beneficiaries.
Concessions have to occur between lessor and lessee in a difficult retail market - but some landlords have decided to take things to the extreme by charging a nominal annual rent of £1 on these spaces. This means that for less than the price of milk, bread, and butter, you can now plonk yourself in a vacant unit, and trade for twelve months. Just as long as you're somewhere dreary. And cold.
A little shocking, maybe; but surprising? Hardly. Landlords are spitting feathers over having to pay business rates on vacant high street units, which now make up over 14% of town centres in Britain. I suspect many would prefer to chew off their own arm than risk increasing this figure by sustaining rents at rates only befitting a strong retail market. What we're experiencing is anything but.
One man likely to be particularly aghast at this is Russian billionaire, Maxim Voznesensky, who has recently agreed a deal to take 249 sq ft on Old Bond Street for 18 years at £225,000 per annum - the equivalent of £903.61 per square foot every year. Some basic maths would indicate that this pitch is 225,000 times more desirable than those given away by landlords - yet I'm sure Mr Voznesensky is sitting with his FT and morning coffee, wondering if maybe he should have held out for a cheaper space in one of these cold, dreary locales.
Maybe things would be better if landlords in the housing market were forced into a similar position. The problem of decreasing disposable incomes would be solved, the retail market would be gloriously resurrected, the high street buoyant and town centres thriving - while malevolent, tyrannical house barons sob in a ditch.
I'm not holding my breath...
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