The UK property industry is disappointed that the UK government’s ‘roadmap’ out of Covid lockdown does not address a return to office working.
After almost a year of working from home where possible, the future levels of office occupation have become a key preoccupation for landlords, developers and occupiers. But UK prime minister Boris Johnson’s announcement on 22 February of a four-step emergence from the current lockdown in England does not address the issue.
Alistair Elliott, senior partner at Knight Frank, commented: ‘Despite a number of positive announcements, it remains very disappointing that the government has yet to fix a date for when people will be encouraged back to the workplace.
‘Many of the businesses which the Prime Minister has announced can begin to reopen will require the return of commuters in order to make this viable.’
He added: ‘It is also particularly pertinent given that mental health problems appear to be growing and mass working from home is an ongoing struggle for businesses. Industry now needs to be given clear guidance on how employers can re-engage their workforce.’
The British Property Federation also called on government to provide clarity for office working. Melanie Leech, chief executive, said: ‘Office workers underpin our town and city centre ecosystems – many high street businesses, from cafes to gyms, depend on footfall from nearby offices.’
Following schools reopening on 8 March, the road map says that non-essential shops can reopen no earlier than 12 April. This date also permits reopening of outdoor service in restaurants, pubs and leisure such as theme parks and drive-ins.
Indoor attractions such as museums and cinemas are in the third phase of no earlier than 17 May. On this date, hotels and other hospitality can reopen to household groups. Non-essential international travel is under review but will not be allowed earlier than phase three.
The target is for remaining restrictions to be lifted no earlier than 21 June.
Retail rents to be renegotiated
UK law firm Royds Withy King, which advises many retailers, believes the roadmap will likely result in the lifting of the UK’s moratorium on winding-up petitions: ‘There will undoubtedly follow a flurry of activity with landlords seeking to recoup lost rent,’ said partner Vicky Hernandez.
She said that retail tenants ‘have the upper hand’ and will use that to renegotiate rents.
‘Take, for example, shopping centres that have lost anchor tenants following the collapse of Debenhams, Top Shop, Top Man, Evans, Burton, Dorothy Perkins, Miss Selfridge. Footfall in those centres is likely to fall and other retailers will be questioning pre-COVID rent agreements.
‘Destination high streets may also look very different, as wealthy overseas visitors continue to face travel restrictions. The rents on flagship stores can be extremely high and are unlikely to be sustainable.’
