16/4/21 – Court Decision on WHSmith’s Westfield Lease Renewal During the Pandemic

An interesting decision was published this week regarding the lease renewal of the WH Smith store in Westfield London (Shepherds Bush).

A number of issues were considered, including:

  • A pandemic clause – how much the rent will be during a pandemic lockdown period, what triggers it and whether it should apply to businesses which are not obliged to close but nevertheless adversely effected.
  • Service charge issues.
  • The new rent payable (which was decided at a substantially lower level than the previous rent passing, due to the declining retail market).
  • The interim rent, which was significantly higher than the new rent backdated to the previous lease expiry, due to the market changing between lease expiry and the court decision.

There are many interesting points that have arisen, and no doubt landlords, tenants, and their surveyors will be quoting various parts of it to support their contentions of how the pandemic has affected property rents, not just in the retail sector.

We are seeing a number of pandemic clauses being inserted into new leases over the past 12 months. However, it should be noted that the decision, being from the County Court does not set any binding precedents for other cases.

If you would like to discuss this or any other lease renewal or rent review query please contact one of our lease advisory team.

Francis Tomlinson

Robert Clifford