A group of leading retailers and retail property investors are to meet to address the issue of quarterly rent payments through a joint working group.

For many small businesses upfront quarterly payments are a financial burden and seriously reduce their available cash flow. This has become an even more pressing issue in the current financial climate.

At the meeting retailers will press for a move to monthly payments with their position strengthened by news that Hermes, one of the largest landlords in the UK have started offering more flexible terms.

Pensions fund manager Hermes owns £11bn worth of property in the UK and recently agreed to scrap existing lease terms and introduce more flexible conditions for its 2,000 tenants.

However, the landlord said a move to monthly rents was likely push up rents by up to 1% to offset added financing and administrative costs.

Other landlords have indicted that they are willing to consider monthly rents for new leasers or where retailers are close to bankruptcy, but intend to keep the existing structure in place for current clients.

Landlords are keen to keep the quarterly rent payment system in place as it provides them with a large sum four times a year and involves less administration.