Major property consultancy says landlords and retailers must move to a system where they share information on footfall and turnover so that rents to be calculated more fairly.
The retail property market must move to a model where rent rises are based on footfall and turnover not automatic increases, a leading property firm has said, if the sector is to survive after the Coronavirus crisis.
This is backed up by new research that shows 40% of landlords are now more likely to consider these factors when setting a rent.
But approximately two-thirds of landlords don’t have access to this data which would help them measure who’s visiting their properties, where these shoppers come from, or the purpose of their visit, according to Colliers International.
It believes landlords need to share this information with retailers in return for sales data so both sides can benefit – but another 40% of those surveyed said they wouldn’t want to do that.
Matthew Thompson, head of retail strategy, says: “This unwillingness to share data between stakeholders needs to be resolved if a new model for retail property leasing is to emerge from the devastation of the pandemic.”
Colliers surveyed the owners of more than 120m sq ft of UK retail property and found that 79% believe the COVID-19 pandemic will bring permanent changes to how retail property is leased. Thompson adds:
“The insights from this survey demonstrate that the relationship between the landlords and occupiers of retail property is changing irrevocably.
“The challenge now for both sides of the equation is who can respond in a way that can sustain a contractual relationship which is viable for all parties.
“It’s clear that we’re going to move away from the old model of how shops have been rented out. In an environment that can integrate masses of relevant datasets, more precision can be brought to the pricing process and this will benefit both landlords and retailers.”