Landlords have been urged to be more flexible in their relationships with tenants in the hospitality sector to help businesses survive the recession.
Property owners and tenants who are willing to work together toward a common purpose are more likely to survive the recession and prosper in the long-term, according to Chris Day, international managing director at Christie & Co's.
Speaking at the property agent's Business Intelligence seminar, he said: "Landlords do not want to be left with vacant units so they need to be aware of how successful, or otherwise, business operations within their portfolios are and should be more proactive and engage with their tenants about potential options."
Day pointed to the growing trend for landlords to be more flexible regarding rental payments by switching from quarterly to monthly payments or agreeing to reductions in order to help an operator's cash flow.
"If landlords are able to take an operational interest in a pre-administration scenario, they may be able to make some form of stabilising concessions or investment and in the process help to maintain the goodwill of the business and assist its ability to trade through to ultimate profitability," he said.
Day also urged investors in the hospitality sector to take more risk up front in the absence of available credit from banks.
"A few years ago investors could approach a bank and ask it to do a deal and would only have to invest a small percentage of their own capital, in some cases none at all," he said.
"However, in the current market the boot is on the other foot and investors are now faced with the need to readjust to the changing market and to genuinely invest a significant amount of their own capital. The days of investing 10% or less are gone."
By Gemma Sharkey
E-mail your comments to Gemma Sharkey here.