As a result of the spread of Covid-19 and the elevated lockdown status being enforced across the UK, we are managing a significantly reduced level of occupancy across much of our portfolio, causing us to review services and service charge levels at every asset.
THE IMPACT ON RETAIL & LEISURE SECTORS
Within the leisure sector and large sections of retail, occupiers are adjusting to significantly reduced levels of trading or Government mandated closures of their units. At the same time a number of key retailers, such as supermarkets and discounters are seeing unprecedented demand for food and cleaning products. Retailers and site teams are working together to help ensure a safe and orderly access to their stores whilst maintaining social distancing.
In these unprecedented times, we are working with our clients, occupiers and service providers to ensure that the services provided and service charge levels, are appropriate for each property and the unique circumstances faced by each. There is clearly a desire from occupiers and landlords alike to reduce service charge where occupancy levels are reduced.
GETTING THE BALANCE RIGHT
A balance needs to be struck between reducing non-essential services whilst ensuring statutory compliance, security and the safety of public, occupiers and staff. There is no ‘one size fits all’ approach. Our property management teams have the knowledge and experience to ensure the services provided remain fit for purpose. Not all changes will bring immediate savings, or indeed savings at all, for example where security needs to be enhanced.
For obvious cash flow reasons and to ensure each property is managed appropriately, it is important that on-account service charges continue to be paid in full. Any savings that are achieved will be passed on as a credit at the year end.
We continue to follow Government advice and work alongside various industry organisations to ensure we are providing our clients and occupiers with clear and appropriate advice during these challenging times.