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Parfitt Cresswell Commercial Property Bulletin 4
Parfitt Cresswell • Sep 24, 2020
This article is brought to you by our sponsors Parfitt Cresswell
Whilst the residential property market in the southeast appears to be holding up against the ravages of the recession, there are signs that Covid-19 is starting to take its toll on the commercial real estate market despite the measures brought in by the UK Government to protect commercial tenants. Unsurprisingly, the sectors that have been hardest hit by the pandemic, such as hospitality and the arts, are having difficulties in maintaining premises. A number of household name restaurant chains have announced nationwide closure programmes and, in the arts, theatres and music venues are also struggling to remain afloat.
In Haywards Heath, a town with a population of approximately 35,000, where Parfitts has two offices operating under its Colemans Solicitors brand, the only arts venue – Clair Hall – was closed last week by the local council. Although Clair Hall was publicly owned and had been loss-making for some time, its closure points to wider issues in the property market and the decisive “final nail” effect that Covid-19 is having across the country.
It seems that the key to making use of these newly vacant spaces is increased flexibility. In other parts of the country, such as Greater Manchester, empty theatres are being repurposed as court rooms to help clear the current backlog of legal cases: so-called “Nightingale” courts. Earlier in the year, we saw the whole of London’s ExCel Centre turned into a hospital (though, thankfully, it never had to admit a patient). The longer term economic and social effects of Covid-19 remain to be seen, but this kind of creative use of space is to be welcomed and perhaps gives an indication to the private sector of things to come.
The future of the High Street, and its apparently imminent demise, has long been the subject of debate and we may now be witnessing a definitive shift towards e-commerce as the dominant way that customers choose to shop. But, at the same time, we are seeing a greater emphasis on home-working, meaning that smaller local retailers and food outlets are reporting increased footfall while larger companies are reducing their physical footprints. In the news this week it was reported that sportswear firm Nike “has seen a huge rise in online sales as it bounces back from a coronavirus slump” and the chief executive was quoted as saying: “We know that digital is the new normal. The consumer today is digitally grounded and simply will not revert back”.
In common with all businesses, commercial landlords and tenants need certainty when it comes to their contractual arrangements, including in relation to their properties. Nevertheless, in response to the significant uncertainty created by the current crisis, the emphasis of advice given to commercial landlords and tenants by both the UK Government and property professionals has, rightly, been on flexibility. To date, this has principally meant flexibility on rent levels, with payment holidays and temporary rent reductions being negotiated. However, given the repurposing seen in the public sector discussed above, it may well be that commercial landlords will also have to embrace even wider flexibility to keep rental incomes flowing, possibly by accepting that their premises will be put to different uses at relatively short notice (particularly in light of the Conservative government’s stated determination to relax UK planning regulations), which could also include accepting greater fluidity through being more open to tenant assignments or subletting.
As established retailers retreat from the High Street, should landlords be willing to accept more pop-ups and microbusinesses as tenants? Should landlords accept less certainty when it comes to the length of terms, potentially through greater use of short-term tenancies or licences, in return for higher rates of occupancy? As Marks & Spencer continues to close larger stores, the Co-op has announced that it will be opening 50 smaller convenience shops, having found that 70% of adults have relied on their local convenience store for food and other goods in recent months; so should commercial landlords be looking to divide their larger premises into smaller units? Will smaller, private commercial landlords look to exit the commercial market altogether and convert premises to residential use in readiness for sale?
Questions such as these have always been asked by property professionals during recessions and times of economic uncertainty, but they have been brought into even sharper focus due to the way the current crisis is impacting not just the economy, but the whole way we go about our lives.
In terms of financial responses to the Covid-19 pandemic creative measures quickly implemented, such as furlough and ‘Eat Out to Help Out’, have proved relatively successful in maintaining economic impetus. These measures, together with the rapid repurposing of vacant public premises, provide valuable guidance to commercial landlords, tenants and their professional advisers as we move forwards: creativity, agility and flexibility will be key to navigating the ‘new normal’.
If you or someone you know would like to speak to one of our legal experts regarding a commercial property matter call us today on 0800 999 4437
or email enquiries@parfittcresswell.com
to take advantage of our complimentary, no obligations, initial consultation. We look forward to assisting you with your legal needs.
LinkedIn is a key channel for personal branding, so your LinkedIn profile is the launchpad to building a strong professional network. The channel is also the place to be if you wish to continue relationships of key people you meet at zoom networking events allowing you to easily stay in touch after making the effort to attend the meeting. As well as being the touchstone for nurture and lead generation a well optimised LinkedIn profile is on the same level as making a good first impression when you meet in person. How do you optimise your profile? 1. Make sure you have a current and professional head and shoulders photograph of yourself. You are on the platform to do business so ensure you appear to be there for that reason so a picture with your partner, favourite pet or vehicle doesn’t cut it. It should be a current photograph as it could be embarrassing putting a ten-year-old photo on the platform and when you meet a contact in person you look nothing like your photo so it could end up being a little like a bad first date. Be authentic. 2. Also use Canva.com to create a background image as why miss the opportunity to promote your business. If you have staff on LinkedIn create an image for all of them to use as their background as it’s a little like giving them all a company vehicle with no costs attached. 3. Treat your LinkedIn profile as an online resume and ensure you complete every section – a. The about section – I split this into two sections i. My Background ii. What I Do Now iii. Include an email and phone number at the bottom of this section b. Experience – show at least the last two positions c . Education d. Licences and Certifications e. Skills and Endorsements – You can have 50 of these so put in as many as you can for example if you were a bar person you could include customer service. f. Recommendations – request these from people you know 4. Use keywords in your headline – think of the words you would use if you were looking for your goods or services. 5. Join groups which could be a. Within your industry b. Where your target market is c. Services you have an interest in If you require any help or advise we offer training or talk you through the process via zoom. Blog written by Linda Cloke of We Do Social Media Ltd Contact: Linda@wedosocialmedia.co.uk or call 07769943756
According to the Health & Safety Executive, over 11 million workdays are lost each year due to stress at work! The latest Employment Law Bulletin from our sponsors Parfitt Cresswell Solicitors focuses on the topic of stress in the workplace and the actions that employers can take to defend themselves against claims arising from this. In the Employment Law Bulletin expert Philip Luff covers: • What stress is • The duties of an employer • The potential action that an employee can bring against their employer for work related stress, and offers tips on how employers can best protect themselves against workplace stress claims To read the article and find out more about Stress Related Claims in the workplace click here . If you would like legal advice regarding an Employment Law matter take advantage of Parfitt Cresswell Solicitors’ complimentary initial video/telephone consultation with one of their legal experts. Call 0800 999 4437 or email enquiries@parfittcresswell.com today to arrange your free initial consultation.
This article is brought to you by Parfitt Cresswell Solicitors Extension of the Furlough Scheme (CJRS) On Saturday 31st October the Prime Minister announced a further national lockdown in England to address the increasing rate of Covid-19 infections throughout the UK. This lockdown commenced on 5th November and will remain in place until at least 2nd December 2020. Under the previous tiered ‘local’ lockdown arrangements, the Government had announced two Job Support Schemes which were intended to succeed the Coronavirus Job Retention Scheme (furlough scheme). These schemes were known as the ‘JSS Closed’, aimed at businesses that had been forced to close under the tiered restrictions and the ‘JSS Open’, a scheme for businesses who although affected by Covid-19, were still able to open. These schemes were due to replace the existing furlough scheme when it ended on 31 October 2020, with the Government support significantly reduced when compared with the original CJRS. However, along with the announcement of a national lockdown throughout November, it was also announced that the CJRS would be extended for a further month. A few days after this, the Chancellor announced that this extension of the furlough scheme would now run until the end of March 2021. As such, the JSS is not likely to resurface until at least April 2021 (if at all). How had furlough changed By way of a reminder, the CJRS has been through several changes since its introduction in March 2020, from the Government initially funding 80% of an employee’s salary up to £2,500, with government support reducing in recent months as restrictions eased. In October 2020, the month before the scheme was due to end, the government contributed 60% of unworked hours up to a cap of £2,187.50, with the employer paying the additional 20% along with employer national insurance and pension contributions. How will the extension work? In simple terms, the extension of the Furlough Scheme puts employers back to the same level of government contributions that were available in August 2020, with the Government funding 80% of eligible employees’ salary, but the employer having to contribute both employer national insurance/pension contributions themselves. The current understanding is that the furlough extension will operate largely as it did before, however the following now applies: • The extended scheme will run until 31 March 2021. • The employer or employee are not required to have previously used the CJRS • To be eligible, the employee must have been on the employer’s PAYE payroll by 23.59 on 30 October 2020 and the employer must have made a Real Time Information (RTI) submission for that employee by that date. • The employee can be furloughed either full-time or flexibly (for part of their hours). Employers will need to report and claim for a minimum period of seven consecutive calendar days. • The government will pay 80% of eligible wages for any unworked hours, (up to a cap of £2,500) with the employer paying employer NIC and pension contributions on these unworked hours. Employers will need to pay the employees for any hours worked as per usual. • The employer can choose to top up to 100% if they wish but is not obliged to. • The Job Retention bonus for employers (£1,000 for each employee kept on until the end of January 2021) will no longer be able to be claimed in February as planned, but will possibly be introduced at a later date to help avoid the impact of the furlough scheme ending. • The Government will review the scheme in the New Year, so it is still possible that increased employer contributions could be required prior to the end of March. As with all these announcements, further detail and guidance will follow from the government in due course. If you require further legal assistance regarding the CJRS or and other employment law issue, take advantage of our complimentary initial consultation (available via telephone or video call) today by calling 0800 999 4437 or email enquiries@parfittcresswell.com
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