Orr, A., Gardner, A., Jackson, C. et al. (1 more author) (2023) Changing tenant covenant perceptions and flexibility in the lease model in UK city centres. Journal of Property Research, 40 (`). pp. 1-24. ISSN 0959-9916
Abstract
The retailing industry in the UK is experiencing unprecedented structural change. The impact on retailers has often dominated headlines, along with the impacts on local services and economies, but with little attention given to the implications for property owners and practitioners. Exploring and understanding the responsiveness of landlords, and their behaviours, is essential to understanding the adaptiveness of a retailing system. This study employs semi-structured interviews to examine the short- and long-term changes in the retail market and the actions of landlords in response. The findings span the period prior to and during the first year of the Covid-19 pandemic in 2020, and reveal that fundamental changes have occurred to establish tenant covenant norms and the traditional retail leasing model. The paper explores these changes, including a shift in tenant risk, reposition of the leasing model in favour of tenants, generally, and greater application of turnover rents. The pressing challenge for current valuation practitioners, therefore, is to incorporate these fundamental changes within the market into the pricing of retail assets. Significant progress in this area to date, as explored in the paper, has been limited although greater application of discounted cashflow techniques is set to be encouraged by the RICS.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © 2022 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group. This is an Open Access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. |
Keywords: | Retail market; lease model; turnover rents; tenant covenant; retail pricing |
Dates: |
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Institution: | The University of Sheffield |
Academic Units: | The University of Sheffield > Faculty of Social Sciences (Sheffield) > Department of Urban Studies & Planning (Sheffield) |
Funding Information: | Funder Grant number ECONOMIC & SOCIAL RESEARCH COUNCIL ES/R005117/1 |
Depositing User: | Symplectic Sheffield |
Date Deposited: | 26 Apr 2022 14:28 |
Last Modified: | 24 Feb 2023 09:38 |
Status: | Published |
Publisher: | Taylor & Francis (Routledge) |
Refereed: | Yes |
Identification Number: | 10.1080/09599916.2022.2057866 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:186025 |