Stat of the day: £1

The rent paid by Dixons on 'a small handful' of its 121 retail properties around London. Who says a pound doesn't go far these days?

by Rebecca Burn-Callander
Last Updated: 09 Oct 2013

Landlords are so desperate to avoid paying business rates on unoccupied sites that nominal £1 rents have been agreed on hard-to-let properties across the capital.

As big retailers look to offload loss-making premises, landlords are feeling the squeeze. Rather than cough up for empty buildings, they have sacrificed the rent for the short-term in an attempt to wait out the high street drought.

Alongside Dixons, which owns the Currys and PC World chains, Card Factory has also brokered next-to-no-rent deals with its landlords.

The rates system has come under fire in recent years for chargings retailers an average of 40% of their shops' rental value. Rates are frozen for five years, so do not reflect sudden drops in rent prices but rise in line with inflation: bills will go up by 5.6% next April despite the high numbers of shops laying empty.

Landlords have been trying to tempt charity shops (which pay a maximum of 20% business rates) to take premises in low-footfall areas. Retail guru Mary Portas has warned government that the proliferation of charity shops on Britain's high streets will hit the nation's balance sheets: for=profit shops, unable to compete with the reduced rates, will be forced to close or downsize.

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