Property giant the British Land Company is to give businesses in its shopping malls a rent holiday to help them get through the coronavirus crisis – even though it will cost it about £43million in lost revenue.
The company, whose huge portfolio includes Meadowhall shopping centre in Sheffield and the Broadgate Estate development in London, said it is suffering “ongoing disruption” from the outbreak of COVID-19.
The firm has already closed Valentine retail park in Lincoln but the remainder of its centres, including Plymouth’s Drake Circus Shopping Centre and Hull's St Stephen's remain in action.
But now British Land, which posted a loss of £404million for the six months to November 2019 due to closing shops, has acted to protect its remaining tenants.
The company has told its small tenant shops, restaurants, cafes and leisure businesses they don’t have to pay any rent between April and June, a £3million hit to the business.
For larger tenants “experiencing financial challenges because of COVID-19” British Land is deferring the March quarter day rents and spreading repayment over the six quarters from September 2020 - which will cost it about £40million.
Dividends have been suspended as a result.
Meanwhile, to ensure the safety of construction workers, it has stopped work at its major office development schemes at Liverpool Street and Triton Square in London, and said those projects will now be delayed.
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Work to round off a development at Bishopsgate, in London, has also stopped, though construction is complete.
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British Land said 41% of is business is retail but only 12% of its tenants, about 200 units nationwide, are now open.
A statement to the stock exchange said: “Our primary focus through this exceptionally challenging period is to ensure our people and their families are safe, our assets are securely maintained, and we are protecting the long-term value of our business. A core part of this involves working closely with our customers and suppliers to support them.”
It added: “Following the new measures announced by the Government on March 23, one of our retail centres is closed (Valentine, Lincoln).
“All others remain open to provide important access to essential stores such as supermarkets and pharmacies. Overall, as of March 25, around 200 individual units (c12% of the total) are open.
“Our immediate priority is to support those customers who are being hardest hit. At sites we control, we are therefore releasing our smaller retail, food and beverage and leisure customers from their rental obligations for three months (April to June). The financial impact in terms of lost rent and service charge is c.£3m.
“For other retail, food & beverage and leisure customers experiencing financial challenges because of COVID-19, we are prepared to defer the March quarter day rents and spread repayment over the six quarters from September 2020.
“On the sites we hold in joint venture or via fund structures, we are working with our partners to agree an appropriate approach. We estimate the aggregate amount of March deferrals across the Group will be c£40m (British Land share) assuming this is extended to joint venture and fund properties.”