St David's 2 is a joint venture between listed property giants Land Securities and Liberty International, and the former has launched a new UK-wide initiative to support retailers battling current economic conditions. Known as Clearlet, retailers signing new leases can now opt to pay rents on a monthly (not quarterly) basis to help reduce pressure on cash flow. Uplifts are linked to RPI rather than a fixed upward-only rent review every five years. To qualify, retailers will have to disclose turnover figures to help Land Securities asset manage centres to their maximum potential.
"This only applies to new leases; we are not going to re-engineer all of our existing leases," clarifies Land Securities managing director of retail, Richard Akers. "We believe it meets the majority of demands retailers have been making in recent years. We already receive a lot of turnover information from our occupiers, and it is very important when it comes to asset managing schemes. Marketing initiatives can have a massive impact on turnover, for example. Plus, by feeding back generic information, retailers in our centres can measure how others in their sector are trading."
James Ebel, partner at Harper Dennis Hobbs, which represents 25 major retailers across Europe, welcomes the move. "Generally in the UK, retailers are very secretive about turnover figures. By contrast, in the US, they're very open. It's good for retailers to know what the turnover of neighbouring units are when they sign up for a lease."
Increasingly sophisticated shopping centre management has shielded the sector from the current carnage on UK high streets. Research from the Local Data Company shows that one in 10 high street shops have ceased trading since January. The group tracks over 250,000 retail units in 705 town centre locations.
