Retail warehouse buyers

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Retail warehouse buyers in the UK have nearly dried up.  Retailers are still going out of business as people are not spending money in shops.  This is due to the cost of living crisis, supply chain problems and increases in transportation costs.  This is affecting retail warehouses and retail in general.  Even online retailers are suffering.  Made.com has just gone into administration and there has been a recent wave of other retail failures.  Over 25% of retailers say they are 4 weeks away from going bust.

What affect does this have on retail warehouse buyers and sellers?  Those who own retail warehouses want to sell and those who still want to buy are making very low offers.  This sector is suffering very badly and values, which have fallen by around 10% over the past 3 months, are expected to keep falling.

If the mass exodus of retail warehouse buyers continues, what will those who own retail warehouses do?  The first thing they will have to do is start a dialogue with their tenants.  Find out how they are trading and ask to see their accounts.  The second thing to do will be to reduce their rent.  After all, having less rent than you were previously receiving is better than having no rent.  Thirdly, consider rent free periods which will help the tenant.  Again, a short period of not receiving rent is better than a long one.  Landlords need to work with their retail tenants so they can continue to trade.  If a tenant stays in a landlord’s shop, but pays less rent, at least the landlord has some income.  Rent is needed by landlords to pay interest on their loans and having a tenant means a landlord doesn’t have to pay rates.  Further, vacant retail warehouses cost money on security and maintenance and its easier to sell a retail warehouse with a tenant in than it is to sell it vacant.

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