Commercial landlords call for flexibility from lenders

London’s biggest property owners have called for more flexibility from banks and lenders as tenants fail to pay their rent during the pandemic, The Times reports.

London Property Alliance, which represents more than 420 members with interests in London, said the “survival prospects” of many property companies and their assets are at risk if lenders do not exercise patience.

Property companies, many of them owned by pension funds, are facing sharp falls in income after restaurants, bars and retailers withheld rent at the March quarter payday on stores that are closed in the lockdown.

That means many landlords could breach debt covenants, which could lead to lenders seizing assets.

Brian Bickell, CEO of Shaftesbury, said: “Lenders could step in and seize their securities and that would mean businesses wouldn’t know if they can re-open again. Our aim is to come out of this with as many businesses remaining open as possible, but we need to get the flexibility from lenders. We do think this is important for financial stability as a whole.”

Cadogan Estates, which owns large parts of Chelsea and Knightsbridge, has agreed rent holidays for struggling businesses.

Land Securities has set up an £80m fund for tenants struggling during the pandemic.