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22nd July 2008
Economic downturn prompts calls for business rent change
Small businesses would benefit from a change in the way commercial landlords collect rent, it has been claimed.
After Arcadia owner Sir Philip Green and Lord Harris, chairman of Carpetright, called on commercial landlords to switch from demanding quarterly rent in advance to a monthly system - and the British Retail Consortium (BRC) also said such a move would help the country's smaller retailers.
Over the past two years, the BRC has led a campaign to change the way rents are collected and it now believes that monthly terms are becoming the norm on new and re-signed leases.
It stressed that tightening economic conditions would make it harder for small firms to find three months rent in advance.
"At a time when retailers are battling a range of rising costs in order to keep shop prices and overall inflation down, the new momentum given to rents reform by some of UK retailing's key figures is welcome," commented BRC director general Stephen Robertson.
"Requiring rents three months in advance is at odds with standard business practice. It's a historic and costly practice, rooted in the days when communications were governed by the speed of a horse."
Recently, Lloyds TSB reported that businesses were becoming increasingly concerned that their sales would slump in the coming months, putting more pressure on them.
(c) 2008 Adfero Ltd.
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