Save our Royal Mile shops, plead owners after rents soar 60%

BUSINESS leaders are demanding a review of rents charged by Edinburgh City Council for properties on the Royal Mile after it emerged traders had been hit with hikes of up to 60 per cent in recent months.

Two operators have recently closed their doors and several others are understood to be considering shutting up shop after the increases were imposed by the local authority.

The news has emerged just weeks after The Scotsman revealed demands from tourism leaders in the city to take action over the Royal Mile to curb traffic levels and make more space for pedestrians.

The council, which has been under fire for allowing too many “tartan tat” shops to open on the street, recently instigated a major review of the Royal Mile.

Improving the “retail offer” on the street is said to be one of the main priorities of the review, which the council says is needed as the Royal Mile is not living up to its role as arguably the most iconic streets in the nation.

The council has insisted it is obliged to “achieve best value” for the 46 retail properties it owns on the Royal Mile, insisting that it is not prepared to “over-subsidise tenancy agreements”.

However, the Federation of Small Businesses has raised concerns after hearing about the rent increases and the recent demise of the Scottish Soapworks store and Bagpipes Galore.

The group said the council’s action was “unhelpful” in the face of the economic downturn and said it flew in the face of claims by the council that it wanted to encourage more independent shops to open on the thoroughfare.

Gordon Henderson, development manager at the Federation of Small Businesses in the east of Scotland, said: “Independent retailers may well ask, when we see footfall dropping, margins squeezing and overheads rising, how the council arrives at rental increases of this magnitude.

“While acknowledging that the council has an obligation to achieve best value for its properties, hiking rents when economic recovery is at best fragile seems to be unhelpful timing to say the least.

“Independent retailers operating throughout the city will be wondering on what basis these rent reviews were conducted and what areas are going to be next.”

A spokesman for the council said: “Rents have been increased where either there has been a rent review or where a lease renewal has been agreed.

“The level of increase varies, depending on the market rent at the time of the review or renewal.

“In terms of existing tenancies, the rent can only be increased where there is a rent review, or where the existing lease is expiring.

“In both cases, rents are reviewed to open market value. If there has been no increase in open market value then rents wouldn’t increase.”

Tom Buchanan, the city’s economic development leader, added: “We do recognise how difficult it is to balance proportionate market rents with a diverse and interesting retail experience on the Royal Mile while at the same time having a duty of care to the ratepayers in ensuring that it does not over subsidise tenancy agreements.”