Chelsea retailers asked to sign tougher leases as neighbourhood booms
Tenants of Cadogan Estates — the landlord controlling vast swathes of London’s Chelsea — are having to sign inflation-linked leases and put down “hefty deposits”, a newspaper report has claimed.
But Cadogan told fashionnetwork.com that the landlord’s leasing model has been the same for 20 years and what’s happening today comes after it provided “exceptional support to local business during the pandemic”.
It added that “as a business we have sought to develop a sustainable leasing model which sees generally minor inflationary rises rather than significant rent reviews every few years. Inflation is also expected to fall dramatically, which will lessen the impact of such increases.”
The estate takes in some of London’s key retail locations, including Sloane Square, the King’s Road and Sloane Street, home to a raft of ultra-high-end labels, as well as small indies and UK and global chains.
Inflation-linked rent deals with upward-only revisions were common features of UK retail before the pandemic and particularly before the downturn that came about because of the rise of online shopping and the Brexit vote in 2016.
But with a lot of space in UK retail staying empty, they’ve become less common. In fact, a number of retailers have also renegotiated rents downwards and some have even managed to secure rent holidays.
However Cadogan Estates — which is controlled by the family of Sunday Time Rich List member the Earl Cadogan — told us that Chelsea is “performing well” and its retail locations “are popular, with new outlets expanding their space and new ones arriving in the area”.
It added that it “deals and works with brands on an individual basis where possible”.
A spokesperson also said: “We recognise the challenges our customers face and have consistently gone above and beyond to support them. Retail and leisure operators have benefited from more than £20million of support through our Business Community Fund alongside major investments into public realm improvements and marketing drives. These have significantly enhanced footfall, ensuring the long-term prosperity of our neighbourhood and its business occupiers.
“Chelsea thrives on having a carefully curated mix of brands – this approach sits at the heart of what we do and it is why Chelsea remains one of the most desirable retail locations in the world. Today’s footfall exceeds 2019 levels and as a result, we are receiving multiple competitive bids for our properties, with several existing operators expanding. This reflects the strength of our relationships and our desire to be a long-term partner for our customers.”
The Sunday Times report had cited AllSaints recently closing its King’s Road store “as a result of the demands”.
In response to this, Cadogan said that “while we can confirm AllSaints have moved from their current location, our relationship with them remains very positive, and we hope to find an alternative and mutually suitable location as one becomes available. We welcome and encourage engagement from our retail occupiers and are always open to discussing how best to support their success.”
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