Rental re-negotiation makes sense.
Merchants must tackle site rental costs
Published: 16 July, 2009
NORTHAMPTON: Merchants locked into property leases should talk to landlords and change rental terms to improve their cashflow.
Martin Meech, group property director of building materials supplier Travis Perkins, said: "Over the last 12 months, we've spoken to all our landlords about moving from quarterly rent payments to monthly ones.
“We've had a 20% success rate with existing leases and a 98% success rate with new leases."
Current economic conditions mean landlords are open to discussion about lease terms. "A lot of leases do need to be modernised," said Mr Meech.
"In other aspects of business you don't receive three months advanced payments, so why should you have to pay rents quarterly?
“Companies should put pressure on landlords. If you don't ask, you don't get," he said in an article in What Investment.
Landlords are becoming more amenable to changes other than payment terms. "When it comes to re-leasing there is definitely scope to negotiate down the cost of rent,” Mr Meech stated.
“Over the last 15 years, we've seen rents increase to reflect growth, now things have gone south they're no longer in line with the general economy. When our rents are up for renewal, that's definitely something we intend to do," he said.