June Quarter Day Could See Writing on the Wall for More Retailers

Yesterday, 24 June, was another quarter day.

Or in other words, rent day for the majority of commercial tenants who pay their rent quarterly in advance.

Having to stump up a quarter’s rent in advance can have a disastrous effect on a company’s cash-flow.

The Guardian reports Lee Manning, the president of the insolvency industry's trade body, R3 warning that a new batch of retailers could be forced into administration as the high street attempts to trade through one of the most financially stressful weeks of the year.

He says, somewhat controversially I suspect, that creditors usually prefer a retailer to go into administration when there is stock in the business that can quickly be converted into cash, meaning that Christmastime is often the most popular period to call in insolvency experts, followed by the end of June, when summer stock needs offloading. 

Administrators appointed today could potentially trade for the whole of this quarter rent free following a recent decision in the High Court.

Paying rent quarterly in advance has been the traditional way of structuring rent payments in England & Wales for a great many years and underpins the classic commercial property investment model.

The English Quarter days are traditionally 25 March (Lady Day), 24 June (Midsummer Day), 29 September (Michaelmas) and 25 December (Christmas Day).

Some leases now use instead the so-called “modern” quarter days of 1 January, 1 April, 1 July and 1 October, although they haven’t really caught on.

Many retailers are seeking a relaxation of their requirement to pay quarterly and would prefer to pay their rent monthly instead.

Their case for doing so has been strengthened by the High Court's decision on administration expenses.

All this grimness may make you want to jet off somewhere else, if you can afford to do so.

Davinder Jhamat, Head of Research and Education at BCSC writing in the Estates Gazette, however questions whether Heathrow is being left behind by its European competitors.

By the turn of the decade Heathrow will lose its competitive position as the top global airport.

COMAC, China's biggest aerospace company is choosing to base its European headquarters in Paris rather than London because of the French capital's better air links.

Davinder says London has a lot to think about.

Better to seek refuge in the past then.

The BBC reports the release a wonderful set of historic photos showing what Britain used to look like from the air.

More than 10,000 images from one of the earliest collections of aerial photography, the Aeorofilms Collection, are being made freely available on the web.

Chocs away!