Covent Garden owner offers rent relief for embattled tenants

The owner of Covent Garden, Capital and Counties (Capco), has offered to support its tenants through restructured lease agreements.

Capco said that for certain tenants which are experiencing short-term cash flow issues, rental agreements will be linked to turnover for the second half of the year in exchange for other provisions such as lease extensions.

Additionally, Capco said “bespoke solutions” have already been agreed with tenants which include rent deferrals, rent-free periods and other arrangements reflecting the position of each customer.

It said these measures will support the reopening of stores during this period of “significant disruption”, ensuring businesses are “well positioned” to benefit from a recovery and prosper over the medium-term.

It comes after Covent Garden’s total property value plunged by 17% to £2.2bn in the six months to 30 June 2020, compared with £2.6bn in December 2019.

Rent collection for the March (Q2) and June (Q3) quarter rent dates were also “significantly lower” than normal levels, with 44% collected for the second quarter and 27% for the third quarter.

Overall 71% of rent has been collected in the first six months of the year compared to 99% for the equivalent period in 2019.

Capco said: “The majority of retail and hospitality customers on the estate have reopened or are set to reopen imminently. Whilst initial indicators are encouraging, the trading environment remains challenging.

“It is too early to predict when footfall will return to previous levels whilst physical office occupancy remains significantly reduced, and with the ongoing travel restrictions and fragile consumer sentiment.