Abolish the 1954 L&T Act?Digital Editor
Tuesday night saw another New Generation BCSC event organised, on this occasion hosted by Henderson Global Investors at Bishopsgate. Although our MD Dan is Chair of the Committee, the general vibe is that younger members like myself are encouraged to come along to hear discussion on burning issues in the market, as well as network with more experienced in the retail property industry.
We were all there to debate the 1954 Landlord and Tenant Act in regards to whether it’s now obsolete and should be abolished for a turnover based system – giving Landlords the ability to refuse lease renewal for retailers that are underperforming within their centres. It became clear to me that as occupiers are regularly opting out of the Act when it comes to lease renewals, it is fast becoming out of date and not benefitting the overall ‘business’ – which of course at the end of the day what all a shopping centre is.
The majority of outlet malls are all based on turnover leases, and in practice this system works in order to establish a stronger more transparent business. However, it is hard for a new centre to use this system when signing occupiers during the pre-let stage when figures are uncertain. There are only four development schemes currently on site – led by Westfield Stratford City. It’s an extraordinarily low number, although during these times of austerity understandable – and will surely put pressures elsewhere on the retail property industry.
As always with this topic and at these events, there was much debate with David Feist, Eversheds; Mark Ashton, Astranta Asset Management; and Alan Spencer, CBRE delivering thought-provoking speeches – well at least for me! – incorporating their own experienced analysis of the issue from their different viewpoints.
Following the seminar I chatted with some of the attendees who weren’t shy in expressing their views on turnover rents and the benefits or negatives they would have. Quite few opinionated lawyers at this event! What was made obvious talking to everyone is that the 1954 Act and a turnover-based system would not work well together. The drinks and canapés were all served in one of Hendersons’ many conference rooms with an incredible view over the city – one positive of working in a large corporation! I’ll definitely be going to the next NewGen initiative – well worth it.
Lucinda Hannington, Account Executive