Retailers cautious after Westfield owner wins unpaid rent court case

Westfield rent The Fragrance Shop
The ruling has led to concerns for many retailers as unpaid rents continue to pile up
// Retailers have expressed concern after the High Court ordered the payment of more than £150,000 of unpaid rent
// The Fragrance Shop must pay Unibail-Rodamco-Westfield £160,000 in unpaid rent and service charges
// The Fragrance Shop took a 5-year lease of premises at Westfield London in July 2019 at an initial rent of £200,000 a year

Retailers have expressed concern after the High Court ordered The Fragrance Shop to pay Unibail-Rodamco-Westfield £160,000 in unpaid rent and service charges that accrued during the pandemic.

The High Court gave judgment last week on the first case where a “Covid defence” has been raised for non-payment of rent.

The Fragrance Shop took a five-year lease of premises at Westfield London in July 2019 at an initial rent of £200,000 a year, but in a “side letter” agreed to an aggregate of a £180,000 per year base rent plus turnover rent.


READ MORE: Westfield owner to reduce US presence and focus on UK estate


The retailer remained closed to the public from March 26 last year to June 15, between November 5 and December 2, and from December 19 to April 12.

The Fragrance Shop has not paid any rent since April 2020. The monthly service charge for April, May and June 2020 is also outstanding.

Fund manager Commerz Real Investmentgesellschaft, which owns the centre in a joint venture with Unibail-Rodamco-Westfield, sought payment for rent amounting to £166,884 (inclusive of VAT) and interest at the contractual rate.

Chief master Matthew Marsh at the High Court granted Commerz Real Investmentgesellschaft summary judgment in its claim against the perfume retail chain, TFS Stores, without the need for a full trial.

However, the ruling has led to concerns for many retailers as unpaid rents continue to pile up.

Unibail-Rodamco-Westfield chief operating officer UK, Scott Parsons said the impacts of the past year, which has seen the industry endure months of government imposed closures, has created “unprecedented challenges for both retailers and landlords”.

“Over that time, Unibail-Rodamco-Westfield has put in place a number of support measures, such as moving to monthly payments, deferred rents and reduced service charges,” he said.

“However, rent collection remains an issue and the government moratorium is not helping as it encourages ‘can pay, won’t pay’ behaviour.

“Ultimately, our strategy is to work with those who engage with us to reach a fair and positive outcome for all and for those who refuse to engage, we have been forced to take stronger action.”

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1 COMMENT

  1. TFS got what they had coming to them – I have no sympathy. They have been openly telling Landlords that they won’t pay because Landlords can’t take any conclusive action and even saying, and I quote, “it doesn’t matter when the moratorium ends because we’ll just do a CVA and you won’t get anything anyway”. They have been up there with the worst retailers during the whole pandemic in their behaviour. The retailers that have acted more honourably have come to arrangements with Landlords and they’ll be able to move on.

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