(Blizzard) Posted March 22, 2011 Share Posted March 22, 2011 Don't be silly. Find me a national retail chain that owns its shops. Just one will do. I wager that you can't find one! tim http://www.answerbag.com/q_view/338672 Anyway, yes, large rents crush businesses. Of course rents and rates are the exact same thing paid to two different groups of people, so exactly which one is worse at any given time varies. Personally, I'd do anything to avoid renting my business premises. Since there are a finite number of locations in a given shopping area, exactly what is the incentive for the landlords not to charge 99% of the profits of the least productive store? Why would I leave employment, to work for myself, only to end up working for a landlord? Quote Link to comment Share on other sites More sharing options...
OnlyMe Posted March 22, 2011 Share Posted March 22, 2011 Good pub bad pub? Also bit on JJB - see soon if their landlords drop the rents / terms. Punch Tavern Set To Close Half Its Pubs http://news.sky.com/skynews/Home/Business/Punch-Taverns-To-Close-Nearly-Half-Its-Leased-Pubs-Demerging-Its-Pub-Operating-Arm-Spirit/Article/201103415957623?lpos=Business_First_Buisness_Article_Teaser_Region_0&lid=ARTICLE_15957623_Punch_Taverns_To_Close_Nearly_Half_Its_Leased_Pubs_Demerging_Its_Pub_Operating_Arm_Spirit Quote Link to comment Share on other sites More sharing options...
Flat Bear Posted March 22, 2011 Share Posted March 22, 2011 I'm just not seeing the advantage in renting? Commercial tenancies are usually underwritten with some kind of personal guarantee....if you are unable to service your rent payments the landlord can & will proceed to ransack your personal finances. It's also worth considering the implications of upward only rent reviews & full liability for repairs & insurances.... these mean that as a tenant you are responsible for the building in the same way as owner occupier would be... except you're paying to maintain an asset you don't own. The biggest issue with money is the monthly cost.... renting would make sense if it was much cheaper than paying a mortgage.. it isn't. In fact rent payments are typically much higher than the mortgage costs on the same building. Renting is more expensive, forces you to accept freehold liabilities and eliminates the option of selling the building or renting it off if your business turns pear shaped. Renting a commercial building means getting into the business "bed" with a fat, lazy and very greedy business partner.. someone who does absolutely no work but who demands a hefty pound of your flesh every month. Add the fact that commercial landlords are, virtually to a man, some of the most unpleasant, greedy people you'll ever meet and renting starts to look even more unattractive. If you have a viable business and the opportunity to purchase your building I'd advise you to grab the opportunity with both hands... you won't regret it. Pay your monthly property cost but get a fixed "finishing line" and a tangible asset in return.... what's not to like? Interestingly I had a chat with my RBS bank manager the other day and was surprised to learn that under no circumstances will they provide mortgage funding for anyone who does not plan to run their own business from the premises. If you're looking to do a spot of commercial buy-to-let empire building then funding is going to be difficult & expensive.. this means less competition if you are looking to buy as a simple business owner. Yes Thanks for that Although things are never that simple, as you know, I have been thinking along similair lines. But we still have the dreaded Business rates that make up around another 50% on top. What can anyone do about that? Quote Link to comment Share on other sites More sharing options...
Stars Posted March 22, 2011 Share Posted March 22, 2011 Yes Thanks for that Although things are never that simple, as you know, I have been thinking along similair lines. But we still have the dreaded Business rates that make up around another 50% on top. What can anyone do about that? Reform so that the owner pays rather than the user Quote Link to comment Share on other sites More sharing options...
winkie Posted March 22, 2011 Share Posted March 22, 2011 They are both in the same predicament.....they both rely on each other, hoping that each will give in to each other...both require the other to succeed....without the continuous flow of credit/investment the consumer will make the ultimate decision. Quote Link to comment Share on other sites More sharing options...
Fishbone Glover Posted March 22, 2011 Share Posted March 22, 2011 Let me get this right, are you saying that being in business per se just isn't viable in 21st century Britain? I honestly don't think it is. For years I've wanted to set up my own business instead of working for others, but over the last few years have completely gone off the idea as I've found nothing that I could do that would be financially viable. As far as I can see, I'd be working my nuts off to give large sums of money to landlords and the government. Sod that! Add in all of the regulations that you need to keep track of and ensure you comply with, and the expense of that on top of everything else, you can see why only the big boys prosper. Welcome to the Corporatocracy! :angry: Quote Link to comment Share on other sites More sharing options...
D179 Posted March 22, 2011 Share Posted March 22, 2011 The commercial market is much more complicated than this and contrary to what people beleive it has gone through the floor. Now in terms of rents, you have various situations that play out, firstly you have historic leases that span a period of recession and therefore potentialy what may have been agreed historically at an market value is no longer the case as rents on new letting have fallen. So in effect it is a little hard cheese on those on leases where the market has fallen. But lease clauses vary and the definitions of what is to be valued at rent review can be different, subsequently large companies such as those mentioned will often employ internally or externally surveyors to research and discuss rents with the landlords surveyor and if still in dispute it will go to a third party determination. It is possible that rents are high and so squeeze the business operating but also as rents fall in other areas provide the company to acquire new space at lower values. Also you have to rememeber large companies were the ones wanting to expand and take more and more space and they were the ones that agreed to lease terms often with both surveyor and solicitor input. In respect of not seeing the downside to owning freehold, there are many downsides but if you think houses are hard to shift, freehold commercial where values have collapsed can be even more so. Also in terms of small business operating from a leasehold property, when things get really tough landlords are often flexible and offer discount/concessionary rents. Also lease will often allow them to assign or sublet to other companies if they want to get out, obviously this is easier said than done. Delaps can be an issue but again most tenants can opt for a schedule of condition prior to taking a lease, this has a limiting effect on delpas claims. The downside that I havee seen is that small business opted to borrow to take on small freeholds, great when things are going well but as it has played out when those small business run in to trouble they then have a business that is stuggling and a porperty that if they vacate they need to find a tenant, again easier said than done. The commercial market was quick to stall and then crash, capital values dropped, larger incentives secured in new leases and eventually a watering down of headline rents. Quote Link to comment Share on other sites More sharing options...
OnlyMe Posted March 22, 2011 Share Posted March 22, 2011 http://menmedia.co.uk/manchestereveningnews/news/business/s/1411859_jobs_lost_as_henleys_clothing_shuts_retail_arm Jobs lost as Henley's Clothing shuts retail arm March 22, 2011 Share Article | Submit Comments | Printable Version Previous | Next Close Map Manchester-based fashion firm Henley's Clothing is closing its retail arm with the loss of 210 jobs due to 'poor trading conditions'. All of Henley's Retail's 18 stores across the UK – including one at the Trafford Centre - are shutting with immediate effect. The job losses include warehouse and support staff. Quote Link to comment Share on other sites More sharing options...
OnlyMe Posted March 22, 2011 Share Posted March 22, 2011 Back from 2008. http://www.thebookseller.com/news/bookshop-woes-landlords-raise-rent.html Bookshop woes as landlords raise rent 27.06.08 | Graeme Neill and Jo Young Suffering bookshops could be forced out of business by rising rents, according to the c.e.o. of the British Shops and Stores Association. John Dean was speaking after retailers contacted by The Bookseller expressed fears that rent increases could drive them out of business amid the wider economic downturn. Tim Walker of Walker Books in Lincolnshire said that in a recent rent renewal negotiation his landlord demanded more than double his previous annual rent, from £31,500 to £75,000. "We settled at £56,000, but ultimately you don't expect and do not budget for rents to double in less than five years," he said. Dean at the BSSA claimed that rents were rising at "way" above the rate of inflation, and were likely to stay up until businesses went bust. Quote Link to comment Share on other sites More sharing options...
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