Arch Company says railway arch tenants affected by coronavirus can defer rent – but traders slam measures
PUBLISHED: 11:34 20 March 2020 | UPDATED: 17:04 20 March 2020
Businesses in railway arches owned by The Arch Company can defer their rent if they are hit hard by the coronavirus crisis – but traders say the support offered is “nowhere near good enough”.
The landlord, which bought 4,455 arches from Network Rail in a £1.46bn deal 18 months ago, announced on Friday it is launching a Coronavirus Support Unit next week. It comes after TfL said it would give 100 per cent rent relief for three months to all small and medium businesses in its estate.
The Arch Company said long-standing small businesses experiencing the worst cash-flow problems, particularly those in hospitality, leisure, retail and overseas travel, will be able to defer rent until government support is in place.
It has also said it will offer help accessing the £330bn fund, which was announced by chancellor Rishi Sunak this week and includes cash grants and loans. Tenants can also switch from quarterly to monthly billing.
TfL has also suspended all rent review negotiations, but the Gazette understands The Arch Company will not be doing that as it pledged in its Tenants’ Charter to clear 80 per cent of the rent review backlog by October 2020. Network Rail has also matched TfL by scrapping rent for its remaining tenants in railway stations for the next three months.
The Guardians of the Arches trade group said the offer was “nowhere near good enough” and say The Arch Company has vowed to review the offer.
Managing director Leni Jones said: “This offer is nowhere near good enough. We have been in discussions with Adam Dakin, managing director of Arch Co today and have made our concerns very clear.
“He has promised to review their proposed tenant support with a view to significantly improving this offering for the thousands of SMEs within their estate, many of whom are at the point of bankruptcy!
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“We await our meeting with Mr Dakin on Monday and expect a serious improvement which meets the gravity of the moment.”
Green Party London Assembly member Caroline Russell, who on Thursday urged Sadiq Khan to introduce the TfL measures, also criticised the measures.
She said: “It is just kicking the can down the road and not even very far down it either. The Arch Company must follow TfL and Network Rail and offer actual rent holidays to its tenants.
“Once we are through this pandemic crisis whether in three, six, twelve or eighteen months, The Arch Company will be much better off if the small businesses have survived the crisis and are ready to rebuild a thriving local economy.”
The Gazette has been at the forefront of the coverage of tenants being forced out by huge rent increases, both in Hackney and across London, since the Guardians of the Arches was formed in London Fields three years ago.
The Arch Company, a joint venture between US private equity group Blackstone and property investor Telereal Trillium, said businesses that are still facing “extreme hardship” after government support will be dealt with on a case-by-case basis.
Mr Dakin said: “We’re very concerned about the effect of the coronavirus outbreak on our long-standing small businesses, particularly those in the retail, hospitality, leisure and overseas travel sectors. They employ thousands of people across the country and we want to make sure that they are not forced out of business due to the huge pressure on short term cash flow.
“We welcome the government’s financial support to small businesses announced this week, but many of our tenants need help with their cash flows now.
“That’s why we’re looking to support small business tenants directly affected by this outbreak through rent deferrals up to three months depending on need. In addition, we will work on a case by case basis to support tenants who, even after government support, may still face extreme hardship.
“Before coronavirus, The Arch Company represented a thriving community of successful small businesses. We want to do our best to keep that successful business community intact for when this crisis is over.”