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BY
ANDREW MOURANT |
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| 'Take
it or leave it' rent row |
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It doesn't matter how well your business is doing if rents go up by more than profits. First Voice hears of traders facing a doubling of rent in already tricky times. Small shops and businesses - workaday, arty, idiosyncratic and outlandish - are a vital part of the ecosystem of historic towns. Cities such as Bath and Oxford need more than ancient buildings to draw in the visitors. Indeed, for many, the one-off shops are a bigger attraction. Yet they're a fragile species. One day they can be trading profitably, only for a draconian rent review the next to threaten their extinction. Ask Mo Fini, who has Latin American craft shops in both cities, or the stall-holders in Oxford's covered market. When landlords - councils, financial institutions or colleges - insist on charging at 'realistic' levels it can mean the end. But when bigger boys with deep pockets are itching to move in, those landlords are unlikely to lose much sleep. There have been few more intense battles than that between Oxford City Council and stall-holders in the covered market, an institution beloved by tourists, students and locals. Traders finding themselves threatened with a 100 per cent increase following their five-year rent review in May 1998 dug in, refused to pay, and are now going to court.
Mo Fini was clobbered by a 60 per cent increase in his five-year review Colin Beaver, head of property services at Oxford City Council, is unapologetic about demanding a high increase. 'The last time rents went up was six or seven years ago. Traders complained and got them knocked down through the councillors, so were starting from a very low level,' he says. 'We are asking a very substantial increase but we have to catch up. You start off asking for something higher than you would expect to get.' In the end, it looks as if a district judge will have to rule on the terms and format of the lease and an RICS surveyor will set the rent.
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Daniel Ganly, senior lecturer in retailing at Oxford Brookes University and secretary of Oxford City Retailers Association, sympathises with the traders. 'The council should do all it can to help preserve the variety and richness of shopping in Oxford even if that means subsidy,' he says. 'If things are left solely to market forces, every high street will look the same.' The picture in other tourist towns and cities around the UK is variable. A survey of around 17 FSB members with premises in the historic core of York found that only two were facing 'slight increases'. Fifteen had had no increase or had even had a reduction. But a few miles away in Harrogate, florist David Durrant, president of the Chamber of Commerce, is feeling the pinch. His landlord, a London property company is asking for a rise around 20 per cent. David has been in dispute for a year. 'If it ends up going to tribunal and an arbitrator allows anything like that, I daren't think what the implications will be for business,' he says. Astronomical rises seem to be the exception rather than the rule. According to the Royal Institute of Chartered Surveyors' last quarterly review of commercial property prices, retail rents were relatively stable. 'What really enraged traders was a clause which meant that anyone vacating a pitch and selling the lease at a profit faced having half the money clawed back' But RICS commercial markets spokesman Kevan Carrick admits this is a broad brush picture. 'In some areas, they go up for local reasons,' he says. 'For instance in Durham City, rents were fairly flat in established prime areas but since the completion of a new shopping development, they've jumped quite a bit.' The RICS and the Government have sponsored an advisory code of practice aimed at small businesses, giving an idea of what any lease should contain. It is obtainable from the DTI or the RICS bookshop. 'Before anyone commits, it's a good idea to take advice from a lawyer or a surveyor,' says Carrick. 'Our findings show that a lot of small business people don't do that.' For the full article, see page 20 of the February/March 2001 issue of First Voice
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Whilst every care has been taken in the compilation of this magazine, errors and omissions are not the responsibility of the publishers or of the editorial staff. Opinions expressed are not necessarily those of the publishers or editorial staff. All rights reserved. Unless specifically stated, goods or services mentioned are not formally endorsed by the FSB which does not guarantee or endorse or accept any liability for any goods and/or services featured in this publication. Copyright NFSE (Sales) Ltd 2001 |
