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Land Securities says most of its retail tenants have not paid their June rent, although shopper spending now running at 80% of last year as stores reopen

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Fewer shoppers are going to the retail parks, shopping centres and outlets that Land Securities runs – but those that have gone in the last two weeks are spending more than they did a year ago, taking store sales to 80% of the same time last year, new figures suggest. Despite this, it says, its retailers have only paid 29% of the rents due on June 24. The news may reflect an ongoing shift in the way that retailers see the value of their stores, with many looking to renegotiate their rents in recent years as shopping shifts further online. 

The retail operator said today in an update that since non-essential retail reopened in England on June 15, footfall at its centres has been only 60% of the same time last year. But it says store sales, on a like-for-like basis that strips out the effect of shop – and business – openings and closures have been at 80% of the same time last year, and average transaction values have been up by 22% compared to last year.

As of June 30, all of Land Securities centres and parks are open in England, Scotland and Wales – from Westgate Oxford (pictured) and Trinity Leeds to Piccadilly Lights in London’s West End. Some 79% of retail units within them are trading. Additionally, 16 of Land Securities’ 18 leisure parks are open, although its Accor hotels are currently closed to the public and will only reopen on a phased basis over the next three months. 

Today the company said that £122m of rent had initially been due on June 24 2020 across its retail, office and specialist developments. Concessions and deferrals meant that a net total of £109m was due to be paid. Of that net rent, 60% has been paid within five working days – down from 94% a year earlier. 

But in retail, payments have been much lower than in offices – even though most shops are now open and trading. Of the £31m in retail rents that was due to have been paid to Land Securities, only £9m, or 29% had been paid after five days. At the same point last year, 92% of rents had been paid. 

By comparison, 81% (or £55m) of the £68m rents due for Land Securities’ offices had been paid by day five, but only 10% (£1m) of the £10m due for specialist sites had been. All of its offices stayed open throughout the lockdown, but many staff at many companies will have worked from home. Land Securities said today that it was working with its customers as they returned to its buildings. At the same time last year, 95% of office rents and 89% of specialist rents had been paid. In total, £44m, or 40%, of the £109m due in rents had not been paid by day five, including £3m relating to customers who had withheld payment while they waited to get concessions that had been agreed put in writing. 

Of rent due on March 25, 75% has now been received but £30m is still outstanding, including £5m relating to concessions and agreed deferred payments.

In today’s update, Land Securities said: “Covid-19 has resulted in some customers taking longer to pay their rent and we continue to have supportive and constructive dialogue with our customers.” It added: “Although restrictions on our customers are beginning to be lifted, our focus on supporting them through the pandemic is unchanged, particularly for those most in need.”

Overall, it said, it remained in a financially robust position, with net debt of £3.92bn, the group loan-to-value ratio standing at 30.6%, and £1.2bn of available cash and debt. 

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