British Land has released its smaller retail, food & beverage and leisure tenants from their rental obligations for three months (April to June).

The landlord said its immediate priority was to support those tenants hardest hit by the coronavirus crisis.

The financial impact in terms of lost rent and service charge is around £3m.

For other retail, food & beverage and leisure tenants experiencing financial challenges, British Land said it was prepared to defer the March quarter day rents and spread repayment over the six quarters from September 2020.

On the sites it holds in joint venture or via fund structures, the landlord is working with partners to agree an appropriate approach.

British Land estimate the aggregate amount of March deferrals across the group will be around £40m, assuming this is extended to joint venture and fund properties.

The group has a revolving credit facilities worth £450m, £1.2bn of available cash and no requirement to refinance until 2024.

The board has temporarily suspended future dividend payments with immediate effect, including the payment due in May.

Underlying earnings for the year are expected to be broadly in line with previous expectations, however the independent valuation of its assets is likely to highlight material uncertainty.

Work has been suspended at development schemes at 100 Liverpool Street and 1 Triton Square.

Practical completion was recently reached at 135 Bishopsgate, with discussions ongoing with occupiers about delaying taking possession.

Shares fell 2% in early trading following the announcement on Thursday morning (26 March).

Nicholas Hyett, equity analyst at Hargreaves Lansdown, said British Land’s high street tenants were among the hardest hit by the coronavirus lockdown, with shops shuttered and revenues falling to zero.

He said: “In theory British Land is still entitled to collect rent, but management have clearly decided that helping crisis hit tenants through the tough times is more important. We think that’s a sensible decision, ensuring there are still shops to open at the end of this comes above a few months’ rent.

“Having said that it’s going to be a painful ride for investors. The dividend has been suspended, and we could see the estimated value of British Land’s assets permanently impacted.

“It seems likely we’re facing an economic downturn, never good news for property owners. Over the long term the rise in homeworking is bad news for central London property values, while online shopping doesn’t bode well for retail centres. They were both trends you could see coming well before the current crisis, but if this accelerates those existing secular shifts there’s a risk British Land’s assets get left behind.”