Maplin's landlords cutting off their noses to spite their faces.

From The Evening Standard:

Landlords to collapsed retailers Toys R Us and Maplin could be left with empty stores totalling more than two Shard skyscrapers and lose tens of millions of pounds in rent, property experts predicted on Thursday.

If no rescue deals are agreed, a long list of landlords could be left with vacant space, including LandSec, British Land, Hammerson and Intu. Industry sources estimate that collectively landlords were getting an income of around £73.8 million a year from the failed tenants.

Ho hum, let’s take one of my favourite shops, Maplin.

Their 2017 accounts show a net loss of £3.9 million after paying £21.7 million in rent.

Sane landlords would just reduce the rent by a quarter, leaving Maplin at least marginally profitable. But instead of accepting £16 million a year easy money*, they decided to push Maplin into insolvency. As a result, they can whistle for the last quarters’ rent and will be stuck with long void periods until they finally decide to accept lower rents.

* The average paid by both businesses was £18.45/square foot. The actual costs to the landlord is south of £10/square foot, so a one-quarter reduction would still have left them with some unearned location rents.

I hope that the landlords can’t wangle themselves any Business Rates discounts beyond the normal three months for empty premises (which is three months too long, if you ask me). If local councils waive the rates, this just enables the landlords to hold all these units out of use for longer, with a corresponding depressing effect on other shops on the same High Street or in the same shopping centre or ‘retail park’.