Rent 'too high' for retailers

Retailers in Jersey are calling on landlords to be more reasonable with the rent they charge on the high street.

Women's clothing shop 'Esprit' has told ITV News it is closing its King Street store because of a 20% hike in rent.

The shop owners currently pay £73,000 per year but the landlord told them they would have to pay £89,000 per year to renew the lease.

Electrical retailer Barry Jenkins says he is not surprised to see the shop pull out of the high street.

Mr Jenkins has owned Fotosound in King Street for 37 years and says business has changed dramatically in that time.

Increased competition from the internet and falling numbers of shoppers have made rent less affordable. He said:

"When we entered into these lease agreements many years ago, they could almost be afforded because trading was good. But now it's not so good.

"Tourist numbers are half what they were, we now have to charge 5% sales tax to the customer and you've got competition from online retailers so actually these rents now, these leases are really not fit for purpose."

Commercial lettings agents have guide prices for rent on King Street and say costs have not changed much in the past decade.

A large store in King Street has a price tag of around £140 per sq ft per year, and a smaller shop on the same strip is around £110.

It is much cheaper to have a store on neighbouring Halkett Place where the rent is anywhere between £25 and £50 per sq ft per year.

Bill Sarre from commercial property consultants CBRE says rents are negotiable and that on the whole landlords are not being greedy.

"Landlords on balance are hugely aware of retailers' problems and many have done quite a lot of things to help out and reduce rent. Now that's probably not universal across the board because what is an average landlord?

"Every property is different, every tenant is different but on average I'd say they are aware that there are serious problems and they wish to do all that's reasonable to keep their tenants."

Mr Sarre admits that in the future some landlords will need to live in the 'real world' when it comes to rental prices, or else risk having vacant properties.

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