Eli5: Why are so many office blocks and retail shops in UK that are ” to let” remain empty for months, rather than to reduce rent ? Why do landlords do this?
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There is a lot of mis information and “fake” info on this thread.
The main reason shops are empty is supply and demand. No one wants them.
If a shop isnt going to have customers it doesnt matter how cheap the rent is people wont want it. Supermarkets move out of town, you cant park on or near the high street so shoppers go to Tescos and get everything they need there or online. A shop keeper would still have the cost of fitting out, running costs, maintenance, insurance and rates (which arent negotiable like rents) So if the property is rated at £x per annum, doesnt matter what the rent is your still liable for the rates.
Talk of long leases, and aristocracy, has very little truth in them and certainly where they do exist the long leaseholder, would not be tied into an RPI rent review clause – partly because they are “relatively” modern and pretty uncommon. The only place i have come across them is in Bath where they were owned by a charity that has been around for 800 years (?) and would sublet on shorter term but they own the long lease and expect to be around for many years. If you take a very long term lease you wouldnt be paying a substantial rent – more likely a premium similar to buying the freehold.
Most property is owned by companies, charities and pension companies. Some is owned by people like the Duke of Westminster but this is a very small percentage and it wouldnt be in their interest to have empty property as they would be liable for rates and maintenance and would devalue other shops they may own in the area.
Absolutely no conspiracy theories, illuminati links, nefarious deals. Just simply down to location and lack of demand.
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