Retail landlords to cut costs, says BPF

Some of the biggest landlord members have agreed a 10-point plan to help retailers cut costs, sealing a truce with Topshop, Next and numerous other high profile chains, the British Property Federation said on Monday.

It comes two weeks after a major public row over the way rents are paid with many retailers claiming that the regime of quarterly advanced payments was causing cash-flow problems. The plan follows trials running since autumn 2008 to help reduce occupation costs for retailers struggling to cope with the impact of the recession.

A pilot project at four shopping centres looked at ways to drive savings through temporary initiatives, short-term deferral of maintenance projects and other operational costs, while driving longer-term savings through improved process and by mutually identifying changes to service requirements. The scheme has been extremely successful with projected savings achieved of between 10% and 20% in the initial four shopping centres.

Liz Peace, chief executive of the BPF, said: 'This is evidence that a real difference can be made when landlords work together with their tenants. While the property industry has been as badly hit by the downturn as retailers, we are obviously keen to help our tenants survive and are prepared to work with them to improve efficiency, cut costs and do whatever we can to make sure that both sides of the business can get through these challenging times.'

The plan builds on the lessons learnt from the pilot and from an open and constructive dialogue between the retailers and landlords that sprang from the collaborative working Group. Last November, BPF president Francis Salway, who is chief executive of Land Securities, wrote to over 500 property firms to encourage them to constrain service charges.

Commenting on the new plan Richard Akers, Land Securities head of retail, said: 'We all know the retail market is difficult and as major landlords it is a win-win situation if we can help to strengthen the position of our retailers. The Ten-Point Plan has been created so that it can be applied in almost any shopping centre to help identify potential savings. It is a checklist to assist landlords in evaluating current practise within their portfolios and even when no savings can be made it can provide a consistent framework on which to review costs.'

LandSecs and British Land have already rolled out the cuts in service charges to the other centres in their portfolios.