Shopping Centre


Published:  13 July, 2006

A number of straws in the wind at the moment show that management issues are once again moving up the property agenda.

First, we have the new code of practice on service charges. This has won industry-wide support from bodies representing landlords, tenants and intermediaries, but the most significant move is the decision by the RICS to make adherance to the code mandatory for its members. Managing agents who are RICS members (and that's the vast majority of the bigger practices) will be able to depart from the code, but they will have to have a good reason.

And the decision to impose a common format for service charge budgets means tenants will at last be able to compare apples with apples when evaluating competing centres. Although JLL has done sterling work over the years with its Retail Oscar research, this means benchmarking of service charges could become a reality.

But this new transparency has a downside for managers: there will be fewer grey areas where expenditure can be hidden.

At the same time we have the BRC mounting a vigorous campaign to get rent payments treated just like other commercial debts, paid 28 days in arrears rather than quarterly in advance. On the face of it there is some merit in the BRC's argument. Why should suppliers of floorspace have preferential treatment over suppliers of electricity or baked beans? At a time when retailers are under pressure there would be tangible cashflow benefits.

The fact is that retailers have an appalling track record when dealing with their suppliers. Only this week the Federation of Small Businesses has been up in arms because Matalan unilaterally imposed a 2 per cent surcharge on all of its suppliers' invoices.

It's only the priveleged legal status of property-related payments that stops retailers treating landlords in the same high-handed fashion. Regardless of the moral argument, any landlord that gives in is no better than a turkey voting for Christmas.

Graham Parker, Editor