Bensons for Beds
The impact of the Covid-19 global pandemic has been felt across the world and, internationally, Governments have introduced unprecedented measures and emergency legislation in an effort to mitigate the health and economic consequences. In the UK, the Coronavirus Act introduced a raft of provisions, some of which impacted directly on the UK’s commercial (and residential) property landlords. For many landlords the combination of a devastation of their tenants’ business, coupled with the introduction of legislative measures protecting tenants from the means by which landlords could pursue rent arrears, has led to a substantial increase in voids alongside a fall in rent cash flow which has placed some landlords carrying secured debt in a perilous position.
This situation has highlighted, perhaps as never before, the importance of landlords’ advisors engendering close working relationships with their client’s tenants (or “customers” to use the emerging terminology); to be on the front foot dealing with issues before they become major problems, and working in partnership with tenants to develop and introduce balanced measures to sustain both tenants’ businesses and landlord’s interests.
The retail and F&B sectors have been affected by the pandemic arguably to the greatest degree, and those retailers and operators generating the majority of their trade from the built estate have suffered the most.
Throughout 2020, THP has been working closely with tenants of its investor clients to create bespoke packages to maximize rental income whilst also protecting the long-term viability of the underlying businesses. Leases have been extended or varied in consideration of short-term financial support, new terms concluded swiftly with businesses entering or emerging from administrative protection and, where necessary, making sure that our clients are prioritized for payment where solvent tenants have used the current circumstances to try to avoid their contractual liabilities.
One example, amongst many, was the close collaboration with retailer Bensons for Beds, whose former company underwent a restructuring in June 2020 involving a pre-pack administration, re-emerging under the same ultimate ownership but trading across a reduced estate. Terms were quickly concluded for a new 10 year lease at a re-based rent, securing long-term cash flow for our client.