Retail landlords could lose £393m in rent payments following therecent spate of administrations on the UK high street, according to the Investment Property Databank.
The current annual rent payments from retailers including TJ Hughes, Jane Norman, Habitat, Focus DIY, Homeform and Oddbins is £35.8m,representing 0.5% of the £7.2bn annual income stream.
These retailers have lease commitments of between 5 and 12.5 years, and average 10.8 years across all of the IPD quarterly dataset.
Focus DIY and TJ Hughes represent the biggest hit for landlords, comprising 0.26% and 0.11% of their income streams respectively.
Malcolm Hunt,director and head ofUK and Ireland Client Services at IPD, said: “The total annual cost to landlords of these administrations could be as high as £35.8m based on IPD data. Obviously some of these costs can be mitigated through reletting, as was found following the demise of Woolworths and MFI.
“Only 16% of property funds could lose more than 1% of their income stream as a result of these corporate failures. The two most important retailers affected are Focus DIY and TJ Hughes with potential total impacts over the lifetime of their leases of up to £231m and £94m respectively.”
The annual rent bills for retailers undergoing restructurings, including Carpetright, HMV, JJB Sports, Thorntons and Mothercare, are £153m, with an average lease commitment of 9.2 years.
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