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Criterion Capital, the owner of the Trocadero retail and leisure scheme next to Leicester Square in the West End, has won a legal case against one of its tenants over unpaid rent during the coronavirus pandemic.
A judge gave the Trocadero owner a summary judgment in a case brought against three companies that are part of the Cineworld group. That means it essentially wins the case without it going to a trial, City A.M. reported.
The landlord said it was owed £2.9M in rent and service charge that went unpaid. Cineworld argued that it did not have to pay because it had not been able to open its premises during the pandemic. The case is similar to the situation played out between the owners of the two Westfield shopping centres in London and several of their tenants.
“In my view, the requirement for the tenant to pay rent even though the premises could not be used for the intended purpose as a result of unforeseen, extraneous events does not deprive the leases of business efficacy or mean that they lack commercial or practical coherence,” the judge in the case said.
“There is no good commercial reason why the loss should necessarily be borne by the landlord. The risk that the premises cannot be lawfully used in this way has therefore been allocated … by the terms of the leases to the tenant,” he concluded.
Cineworld will have its rent arrears reduced by £621K because of insurance payments it made, City A.M. said.
The Trocadero is famous in property circles as something of a white elephant, a property in a great location that nonetheless hasn't quite thrived in recent decades. In 2018 Criterion won planning permission to turn the building into a hotel.
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