UK retail landlords facing a hard reality

Bloomberg

UK retail landlords are facing a hard reality: the rapid approval of a vaccine has come too late for thousands of their stores.
The collapse of department store chain Debenhams Plc and Philip Green’s Arcadia Group this week caps an unremittingly brutal year for the owners of brick and mortar stores. The demise of these retailers alone threatens 16.6 million square feet (1.5 million square meters) of real estate, according to data compiled by Radius Data Exchange.
Nearly double that amount of retail space has already been permanently shut this year in the UK — the equivalent of almost 500 American football fields.
Debenhams and Arcadia “were not so long ago considered anchor tenants,” said
Rob Virdee, an analyst at real estate research firm Green Street Advisors. “The resulting large voids inside shopping centers will reduce even further the little negotiating power landlords still clung on to.”
Crisis enveloped the UK’s high streets well before the pandemic, but the combination of both has proved a lethal cocktail for retailers and landlords alike. Once the bedrock of institutional investors’ property portfolios, the reliable cashflow from malls and stores has become a dripfeed as lockdowns sped a structural shift to online shopping.
More than 20,000 UK stores are forecast to close this year, predicts the Centre for Retail Research.
Women’s fashion retailer Bonmarche Ltd also filed for administration, putting more than 225 further stores at risk.