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Shops Will Struggle To Pay Rent As Cuts Bite

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http://www.guardian.co.uk/business/2011/feb/21/shops-struggle-pay-rent-hammerson

Retailers could fall behind with their rents as the VAT increase and public spending cuts force shoppers to rein in their spending, the owner of the London's Brent Cross and Birmingham's Bullring shopping centres has warned.

Property group Hammerson said: "The effects of increased taxation and restrictions on government spending may mean that some tenants, principally in the UK retail sector, face difficult operating conditions and there is a risk that they will be unable to pay their rents."

Hammerson said its prime UK malls, however, would be protected from widespread rental defaults thanks to the large number and geographical spread of its tenants. "Even if there were a reduction overall in retail spending ... what we're seeing in our portfolio is an increase in market share of spending, and I see that trend continuing in the next 12 months," said chief executive David Atkins.

The shopping centre developer said freezing weather kept shoppers away in December – but once the snow and ice had eased, people preferred its enclosed shopping centres to the high street.

Vacancies at its 16 malls and 17 retail parks in Britain and France fell as the recession led to many new developments being cancelled or put on hold. The group's overall occupancy levels rose to 97.3% – but they are a sharp contrast to the 14.5% average vacancy rate in the high street reported earlier this month by the Local Data Company.

In the 794 towns monitored by the LDC, the vacancy rate equated to more than 26,000 empty shops. Several high street retailers have recently announced plans to shut shops, including the group which owns HMV and Waterstone's.

Sportswear group JJB plans to close up to 95 stores, six of them owned by Hammerson, as part of a court-approved company voluntary arrangement. However, it is the second time JJB has applied for a CVA to ease its problems and some landlords have vowed to block the bid.

JJB, which employs 6,300 staff, took the first step to stave off collapse on Monday as it finalised a £31m fundraising. There were applications for just 3.7% of the shares on offer – the other 96.3% went to the chain's biggest investors. However, the cash is earmarked for creditors and will only last JJB until the end of March, when it will need to get its CVA plan approved and raise another £100m to survive..

How about lowering the rents?

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According to the Guardian (Tax Avioder Par Excellance) the cuts are to blame for everything. I await the headlines.

"Cuts cause Global warming."

"Govt Cuts cause Middle East Unrest."

"Govt cuts mean I can not get a shag."

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Yep, Margate has the highest percentage of empty shops in the country, 37.4%, up from 27% a year ago and of the ones which remain I would guess that many of the freeholds are owned by the shopkeepers since they don't do anywhere enough business to pay rent.

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According to the Guardian (Tax Avioder Par Excellance) the cuts are to blame for everything. I await the headlines.

"Cuts cause Global warming."

"Govt Cuts cause Middle East Unrest."

"Govt cuts mean I can not get a shag."

"Cuts cause house price crash"

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Empty Property Business Rates Relief Cut from April 2011

Wednesday February 2, 2011 at 12:24pm

The Government has announced that from 1 April 2011 the empty property business rates threshold will revert to £2,600 from the current level of £18,000. This will be a matter of great concern for SME's and commercial property owners who have any empty premises in their portfolio.

In addition the 50% relief has also been cut meaning that small firms will not be able to claim Small Business Rate Relief on empty property. This will result in businesses with empty properties facing the prospect of having to pay thousands of pounds extra in business rates from April this year.

The Federation of Small Businesses has warned this will place a very significant burden on companies struggling in the current economic climate. Conversely, this may mean landlords offer empty units on better terms in order to attract tenants.

More including a minor loophole to the above at http://www.business-...rom-April-2011/

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Is there any sort of rule against using commercial property as a residence?

I only mention this as one of the previously empty shops near where I live has now got an elderly couple living in it. They only have the old shop windows and shutters to block out the street so I had not noticed it until the other night. Looks a bit squalid, but that's by the by.

Can you rent a little shop out as a residence? A HMO?

Edit: My post sounds stupid as there are plenty of shops in Bristol with flats on top, but I would like to know about the ground floor.

Edited by Cash with Nowhere to Go

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I was looking at a pub earlier.

£50k for the leasehold.

£26k rent annually.

Turnover 113k.

Why would anyone go to a pub and pay £1.50 per unit of alcohol and not be allowed to smoke a fag when you can stay indoors and pay 30p per unit of alcohol and smoke as many fags as you want?

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The main shopping road in Mumbles, Newton Road, which has traditionally been a very lucrative place to have a shop has seen loads close since Christmas. Must be 6 or so shops closed now which is about 10 to 15 percent I guess.

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Is there any sort of rule against using commercial property as a residence?

I only mention this as one of the previously empty shops near where I live has now got an elderly couple living in it. They only have the old shop windows and shutters to block out the street so I had not noticed it until the other night. Looks a bit squalid, but that's by the by.

Can you rent a little shop out as a residence? A HMO?

Edit: My post sounds stupid as there are plenty of shops in Bristol with flats on top, but I would like to know about the ground floor.

Change of use needed ... Pp from council.

Can be done ..

Look on councils website to see if they have applied

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It just doesn't make any sense, shops will struggle to pay rent as cuts bite - what! Surely there will be more business if cuts are made and taxes lowered.

Honestly if they cut the public sector by 50% and lowered council tax as a result of, I would go out tomorrow on a spending spree to boost the economy.

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Is there any sort of rule against using commercial property as a residence?

I only mention this as one of the previously empty shops near where I live has now got an elderly couple living in it. They only have the old shop windows and shutters to block out the street so I had not noticed it until the other night. Looks a bit squalid, but that's by the by.

Can you rent a little shop out as a residence? A HMO?

Edit: My post sounds stupid as there are plenty of shops in Bristol with flats on top, but I would like to know about the ground floor.

They could be the landlord. Landlords now have to pay the rates/council taxes of empty shops so perhaps they have moved into a property they cannot lease and are renting out their own home to cover the costs?

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The main shopping road in Mumbles, Newton Road, which has traditionally been a very lucrative place to have a shop has seen loads close since Christmas. Must be 6 or so shops closed now which is about 10 to 15 percent I guess.

I live in Grays Essex about half a mile form the massive lakeside shopping centre , a few miles away in Kent is the Bluewater shopping centre.

Grays town centre is the closest to Lakeside and Dartford is the closest to Bluewater, both these town centres have been hit hard over the last twenty years by the big shopping malls . But now they both look like a place at the end of the earth. Drab, dirty , empty , closed down shops , both have been paved in and that makes them look even more void as the vast space between the rows of shops are filled with nothing. The shops that remain are pound strores , brighthouse , charity shops and a few cheap clothes shops .

Only ever go to Grays now if I need the post office which has now been incorperated in WH SMITHS, they closed the post office in Lakeside. Looking around Lakeside there are quite a few empty shops there as well but they cover them up with painted horddings which are very well done so the empty shops do not look so bad as they do in Grays or Dartford.

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Why would anyone go to a pub and pay £1.50 per unit of alcohol and not be allowed to smoke a fag when you can stay indoors and pay 30p per unit of alcohol and smoke as many fags as you want?

Aye, totally agree, I figured it would be very empty bar those stripping copper pipe!

I'm totting up a BYO beer pub. But only one in which one could run a shop next door, an offl-license.

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Why would anyone go to a pub and pay £1.50 per unit of alcohol and not be allowed to smoke a fag when you can stay indoors and pay 30p per unit of alcohol and smoke as many fags as you want?

Are there hordes of young ladies with mini skirts on and clevage on display in your front room?

Hmm, thought not.

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Why would anyone go to a pub and pay £1.50 per unit of alcohol and not be allowed to smoke a fag when you can stay indoors and pay 30p per unit of alcohol and smoke as many fags as you want?

Agree with that and also why would anyone go to a restaurant to pay top whack for food and then stand outside to smoke a fag?

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It just doesn't make any sense, shops will struggle to pay rent as cuts bite - what! Surely there will be more business if cuts are made and taxes lowered.

Ha, who said anything about lower taxes? That's not a part of the plan.

Now that HM Government is up to its eyeballs in debt, our bankster creditors will 'encourage' it to crank up taxes on the proles (VAT+NI+tuition fees are just the start) while cutting spending on prole handouts like state schools, healthcare, pensions etc. The interest payments on the public debt will be used to fund lavish lifestyles for banksters. Whenever the government looks like trying to escape from its debts, the interest rate will rise and the government will return to its hopelessly indebted state.

The banksters won't even bother to pretend that they are offering anything of value. Their money for mansions, helicopters, hookers and coke will be taken from your paycheque by HMRC, every month, whether you like it or not.

Angry yet? Think I'm kidding? This was done with many a developing country in the 70s and 80s. Now it's our turn.

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Why would anyone go to a pub and pay £1.50 per unit of alcohol and not be allowed to smoke a fag when you can stay indoors and pay 30p per unit of alcohol and smoke as many fags as you want?

Because all the old men, whinging about the price of beer and stinking of fags, aren't there

/shrug

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I was looking at a pub earlier.

£50k for the leasehold.

£26k rent annually.

Turnover 113k.

Around me most of the pubs belong to Adnams. They get in people who think that it will be a nice lifestyle,relieve them of their life savings for the lease,charge them a massive rent and make them pay through the nose for beer,wines,sprits etc then they sit back and wait until the poor dupes give up.

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