Retailers are being warned by a Sheffield-based corporate recovery expert to beware of landlords bearing gifts.
Andrew Walker, a partner at lawyers Irwin Mitchell’s Sheffield office, was responding to a survey by the Royal Institution of Chartered Surveyors, which shows that a number of retail landlords are now offering rent-free periods and financial packages to attract tenants.
“We’ve seen cases in which some retailers have taken on premises for either initial rent free periods or even cash payments for issues such as shopfitting.
“However when this period comes to an end they then find that they cannot actually afford the rent,” says Mr Walker.
“This may be because a landlord seeks to recover this initial free period or cash by charging a higher-than-market rent or, quite simply, because the retailer was never going to be able to pay a market rent in the first place.”