Apple seeking up to 50% rent cut from UK landlords due to impact caused by COVID-19
Apple is said to be approaching its retail store landlords in the UK to seek up to a 50% rent cut in exchange for agreeing to extend its leases by several years, according to a report from The Sunday Times, via 9to5Mac.
The British newspaper claims Apple is aiming to strike deals with landlords similar to those offered to other retailers in the country, which have seen store running costs, specifically rents, cut amid weakened in-store sales caused by COVID-19 and the lockdown restrictions that forced many businesses in the country to close from March to mid-June.
According to the report, due to the low footfall its stores are seeing, Apple is asking landlords to consider cutting rent payments by as much as 50% and offer a “rent-free period,” which in exchange Apple will agree to extend its leases by several years.
The Sunday Times explains:
The tech giant has told landlords of a portion of its 38-store estate in the UK that it wants rents slashed by up to 50% and a rent-free period. In return, it has offered to extend leases by a few years Apple is seeking to bring its rents into line with other retailers, many of which are benefiting from cut-price deals as landlords struggle to keep their shopping centers occupied. The company’s proposals are understood to relate to stores with several years left to run on their leases, meaning that landlords are not yet obliged to make a decision. Apple declined to comment.
Apple confirmed all 32 Apple Stores in England would reopen in June after stores around the world closed in light of the global health pandemic.
Shopping center giant Intu Properties, which owns 17 major malls across the country and is home to 10 Apple Stores, fell into administration in June as it struggled with £4.5 billion worth of debt. The announcement put all stores inside the malls at risk of closure, but it has been agreed sites will remain open for the foreseeable future.
The rent reduction deals come at a time when landlords themselves are being hit by the impact COVID-19 has at on in-store retail sales, although it is hoped by supporting retailers now by reducing rent for the short term, it will help keep businesses afloat for the long term.