Landlords, fancy a rent reduction of up to 90%?

No? We didn’t think so! That’s why we were pretty surprised to see that’s what has been agreed as part of the Homebase Company Voluntary Arrangement (CVA) to rescue the business from administration. The CVA will result in 42 stores closing and rents cut by between 25% and 90% on others.

As the economy struggles and the high street is becoming increasingly annihilated, why is it once again falling on private landlords to support the country, keep businesses afloat and preserve the much-loved British high street? And more to the point, how much will that really help solve the problem? Just compare the level of corporate expenditure on rents vs business rates.

For example, the struggling House of Fraser saw its bills rise from £3.99million to £30.24million this year following a Government revaluation, according to industry experts Altus. That is surely far more of a contribution to its struggle than the high street rents it pays to its landlords?

The Homebase CVA deal does include temporarily reduced business rates, which we fully support, but once again we’re forced to question the governments long term plan, or lack thereof. The most obvious strategy would of course be to better tax the ‘online high street’ and use the income generated to help support the high street, the communities they create and the employment opportunities it provides. As The Guardian puts it: “High streets will go on suffering until the digital economy pays more tax” – and as the high street suffers, so do the landlords.   

We all want to see this familiar (and let’s be honest, pretty damn useful) store weather the storm and remain in business. In context of the bigger picture of the 2018 high street it’s not looking good. Homebase is just the latest in a long line of struggling businesses with Toys R Us, Maplin and Poundworld already in administration and Debenhams, House of Fraser, Mothercare and M&S closing stores. So, for Homebase, with 70% of its outlets losing money, is this CVA just going to prolong the inevitable? Meanwhile the Landlords take yet another hit as the Government fails to plan for the future.

The landlords involved in the Homebase CVA deal now have 28 days to contest the decision – let’s see what happens next….

Follow the post and have your say here LANDLORDS REDUCED RENT BY 90%