Landlords eye taking cut of retailers’ online sales as rent

Move comes as tenants fall behind on payments

TRD NATIONAL /
Sep.September 30, 2020 05:30 PM
As shopping habits shift toward the digital, some property owners think demanding a portion of retail tenants’ online sales is only fair. (iStock)

As shopping habits shift toward the digital, some property owners think demanding a portion of retail tenants’ online sales is only fair. (iStock)

Landlords are familiar with percentage rent — taking a portion of retail tenants’ in-store sales — but now, some are thinking of bringing online sales into the mix.

As shopping habits shift towards the digital, some property owners think demanding a portion of online sales is not only fair but might be necessary. However, with little precedent set, it may be difficult, according to the Wall Street Journal.

The increased interest comes as Covid causes retailers to fall behind on rent, even as their online sales remain steady or increase. Many of their landlords have taken a beating.

Unibail-Rodamco-Westfield and Hammerson, for example, have seen their stock values fall around 80 percent since the start of the year. They now trade at a fraction of net asset value.

“How do you value your assets if they are based on turnover that is constantly going up and down?” Tom Whittington of global real-estate agent Savills told the Journal.

Hammerson will now let U.K. tenants switch to turnover-based leases if they pay an “omnichannel top up.” The company will factor in sales from practices such as click-and-collect — in which shoppers buy goods online, then pick them up in stores — to calculate the amount of rent due. [WSJ] — Sasha Jones


Related Articles

arrow_forward_ios
Todd Jones and Albert Banalloun, with a rendering of the project (Credit: Fisher Architects)

Hollywood Publix with boat dock advances

Hollywood Publix with boat dock advances
South Florida’s retail reopening rollercoaster has brought “confusion and hesitation and fear,” as restaurants and other businesses try to adapt to shifting consumer demand. (iStock)

Retail’s reopening rollercoaster: “Confusion and hesitation and fear”

Retail’s reopening rollercoaster: “Confusion and hesitation and fear”
Wynwood Works rendering and Udonis Haslem (Credit: Bobby Metelus/Getty Images)

Magellan Housing and Miami Heat star Udonis Haslem to build Wynwood apartment project on city-owned land

Magellan Housing and Miami Heat star Udonis Haslem to build Wynwood apartment project on city-owned land
Founder and CEO of IT'SUGAR Jeff Rubin, and BBX CEO Alan Levan (Credit: Denise Truscello/Getty Images)

It’Sugar files for bankruptcy protection after sales sour

It’Sugar files for bankruptcy protection after sales sour
River Landing, Andy Hellinger and Coralee Penabad

Years in the making, $425M mixed-use Miami River development opens

Years in the making, $425M mixed-use Miami River development opens
Shoppes of Coral Way (Google Maps)

South Florida investor wants to sell Coral Way retail center for $24M

South Florida investor wants to sell Coral Way retail center for $24M
Ram Realty CEO Casey Cummings and 15601 Southwest 127th Avenue, Miami (Credit: Google Maps)

University of Miami sells land for Walmart-anchored project

University of Miami sells land for Walmart-anchored project
1200 N State Road 7 and 5300 Coconut Creek Parkway (Credit: Google Maps)

CVS, drive-thru bank in Margate fetch $7M

CVS, drive-thru bank in Margate fetch $7M
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...