Major high street retailers to demand switch to monthly rents

The letter is being coordinated by the Property Managers Association, which represents companies including Schuh, Comet, Boots Opticians and New Look, according to industry publication Property Week.

Richard White, the group's finance manager, told the publication that 25 of 26 retailers surveyed felt that traditional 'quarter day' rent payments were a concern.” All 25 said that landlords are either unwilling to change monthly rents or that they proposed significant financial penalties for switching to monthly payments.

"Most member retailers cannot see why they should pay any fees or penalties simply for paying their rents on a monthly basis," White said.

However property law expert Richard Daffern of Pinsent Masons, the law firm behind Out-Law.com, said that it was becoming "commonplace" for landlords to agree monthly rents on new leases due to current vacancy levels as a result of the economic downturn.

"Retailers that are in trouble may be able to persuade landlords to help them survive by paying monthly, but for successful retailers to renegotiate mid lease is a much harder sell. A round robin letter is likely to be ignored, but where there is a relationship across a number of stores and an individual approach is made the landlord is often willing to engage with the retailer," he said.

In a statement the British Property Federation (BPF) accused retailers of "opportunistically and unilaterally" trying to renegotiate leases they had already signed at an additional cost to landlords. A "coordinated campaign" by retailers ran the risk of being seen as the actions of a 'cartel', which would be illegal under competition law it warned.

"I am sure there are no cartel-like activities in this example, but it is worth remembering that it is just as illegal for buyers to fix the terms on which they buy as it is for sellers to fix the terms under which they sell," said Ian Fletcher, director of policy with the BPF. "Monthly rents are relatively common on new leases and I know landlords will look sympathetically at individual cases involving existing leases on a case by case basis, and provide help where the need and benefit is demonstrable."

"What we find disappointing is that some of the nation's largest retailers - who are not in trouble and mainly owned by private equity firms - seem to want to use their muscle to rewrite business terms for their own profit," he said.