The Greedy Landlord?

In this time of when there is a squeeze on credit, shop's margins are often cut to the bone in order that they can sustain enough profit to be viable. In Jersey, 101 Toys closed citing GST as the last straw that broke the camels back. Poundworld closed because it was no longer viable. But is GST to blame, or is it the extraordinarily high rents that landlords (usually companies not individuals) have demanded of shops or stores?

One argument is that rents can be raised to what the market can bear. But it is not quite as simple as that. A shop (or store) has all kinds of furniture and fittings, signage, and so on, which cannot easily be just shifted to a cheaper site because of the expense and loss of earnings incurred doing that. It is not just as simple as a consumer deciding to shop elsewhere.

Once a business is in place, it is to some extent at the mercy of its landlords, especially if it is a shop, rather than offices which can be run from any location. Relocation of retail stores is difficult, time consuming, and cumbersome, and often not an easy option, so that rents can in fact be raised to higher than would be the case.

There is a great deal said about the high cost of renting property to live, but not so much attention has been given to the extra cost - which in one way or another gets passed onto the consumer - of rental costs to retailer outlets. Of course  rents are easy to see for housing in the JEP, but all rental leases do pass through the Royal Court, and are in the public domain. So here are a few, to let the reader judge for themselves - these all relate to leases passed between 2007 and 2008. These are what the stores are paying - per annum - to their landlords.

 

 

£1,840,000.00	A De Gruchy & Co	De Gruchy's Department Store, St Helier
£758,500.00	Norman Ltd	10-31 Commercial Buildings, St Helier
£724,078.00	Norman Ltd	Huelin Five Oaks Depot, St Saviour
£152,646.00	Norman Ltd	Rabeys Universal Ltd, St Saviour
£83,500.00	Three Mile Garage	Grande Route de St Martin, St Saviour
£175,000.00	Big Verns Trading Co	Corbiere Phare, St Brelade
£185,820.00	Big Verns Holdings	Big Verns and Discovery Bay Apartments, St Ouen
£100,000.00	Pizza Express	59/61 Halkett Place, St Helier
£40,438.00	Lloyds Pharmacy	Unit 1 Centrepoint, Red Houses, St Brelade
£39,062.00	Lloyds Pharmacy	Unit 2 Centrepoint, Red Houses, St Brelade
£96,750.00	Axle Clothing Co	55 King Street and 12 Broad Street, St Helier
£1,130,000.00	Marks and Spencer	King Street, St Helier
£141,200.00	Marks and Spencer	1 and 5 Maison du Squez, St Clement
£168,750.00	Marks and Spencer	St John
£400,000.00	Woolworth plc (20 yrs)	23-35 Halkett Place, St Helier