Coronavirus: Thousands of rail arch tenants will go out of business without rent cancellation, landlord told
- Credit: Archant
Thousands of railway arch tenants will go out of business unless their landlord agrees to cancel rather than defer rent during the coronavirus pandemic, traders have warned.
The Arch Company, which bought 4,455 arches from Network Rail in a £1.46bn deal 18 months ago, announced on Friday it was launching a Coronavirus Support Unit, allowing tenants to defer rent for up to three months and offering help with access the government’s relief packages.
But the Guardians of the Arches (GOTA) trade group, which formed in London Fields three years ago and now represents hundreds of small and medium-sized enterprises (SMEs), said the offer was “nowhere near good enough”.
The group called for The Arch Company – the largest landlord for small businesses in the UK – to cancel rents for three months as TfL and Network Rail had done for their tenants.
Following meetings with managing director Adam Dakin, GOTA has managed to secure some improvements, including a six-month freeze on rent reviews and a multi-million pound hardship fund, but there is no movement on the rent deferral.
In a letter to traders,GOTA director Leni Jones said the offers fall “far short” of what is needed and said The Arch Company should bear some social responsibility for its tenants.
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She said: “The feebleness of this offer will almost certainly put thousands of SMEs directly out of business. Already fragile light industrial and manufacturing sectors are being put at immediate risk, with many already in debt due to massive existing rental demands.
“Why can’t Arch Co or its parent companies dip into their enormous resources and match [TfL and Network Rail’s offer]? Instead they are pushing the burden back to SMEs to make impossible choices between taking on massive debt or going out of business.”
Last month the Gazette spoke to businesses, including flagship brewery Five Points, that were struggling with rent demands. That was before the coronavirus lockdown. It is understood some traders are now defying government advice to continue working.
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Leni pointed out that before the sale and in its Tenants’ Charter, The Arch Company – a joint venture between US private equity group Blackstone and property investor Telereal Trillium – vowed to adopt a “tenants first” approach.
She added: “For nearly two years we have been told by the new landlord they would put tenants first. Now, when it really matters, they are putting themselves first and seem prepared to allow thousands of their tenants to go to the wall.”
GOTA said it would take action and urged any of its tenants who need help to get in touch.
Leni added: “We will be working tirelessly with our members throughout this crisis to support them in every way we can. We ask only that the Arch Co do the same.”
A spokesperson for The Arch Company said: “We are 100 per cent focused on helping the small independent businesses across our arches community through this crisis. As our tenants await government financial support, we are implementing several measures to help them stay afloat, including three month rent deferrals for tenants in need, monthly instead of quarterly payments, and a hardship fund that will provide several million pounds of additional support to individual tenants who are facing extreme hardship.”