Emirates residential property drops service charges
A report from United Arab Emirates about residential landlord, Nakheel (Dubai World subsidiary) dropping service charges on its residential holdings at its Discovery Gardens development.
“He who pays the piper….”
The majority of commercial service charge leases are drafted on the basis that the service charge is paid in advance. There are thus large sums of money lying in service charge bank accounts, on which interest accrues throughout the year.
PRUPIM extends help to retail sector by offering to take monthly rents
Leading global real estate investment manager PRUPIM is to allow the majority of its UK retail tenants to pay rent on a monthly basis for a temporary period in the response to the economic conditions faced by the retail sector.
PRUPIM estimates that up to 1,500 tenancies will be eligible for the 12-month scheme which takes effect from March. Retail tenants will have to commit to electronic payments, which may necessitate up to 12,000 additional collections.
“This is a quick and simple means of delivering immediate relief to the retail sector which is facing tremendous pressure on cash flows,” said PRUPIM Head of UK Asset Management, Peter Best.
“The UK is now officially in recession and months of deteriorating trading conditions on the High Street and beyond have necessitated new thinking. PRUPIM considers it has an obligation to identify ways of providing support to the retail sector,” he said.
“While this initiative requires significant additional administration, it will allow retailers more flexibility in terms of helping to manage cash flow during extraordinary economic times. It also helps PRUPIM maintain its strategy of preserving long term, sustainable returns from property investment. This approach is not a permanent move and we will review its effectiveness as appropriate,” he added.
PRUPIM has also today announced a revised Small Retail Business Policy which allows the payment of monthly rents on a permanent basis for smaller retail businesses. These will include the majority of companies, partnerships or individuals with up to three tenancies with PRUPIM, where the rents do not exceed £50,000 per annum per unit.
“Retailers have been telling us that these initiatives will assist them in the current environment and we have been listening and responding. PRUPIM puts good customer partnerships at the heart of our business strategy and this initiative is intended to deliver just that. Although there will be some exceptions to our approach, we hope this initiative will provide relief to most retailers in a difficult climate,” said John Duxbury, Director of Retail Asset Management.
