Over the last 5 years, Rents on West End, Mid Town and City Restaurants have been known to rise by about 20% on average, from 2015 to 2020.
The peak of these rises has been the last 2 or 3 years of the quinquennial term.
Rates have also risen exponentially, as with all other costs. A lot of Restaurateurs have shown minimal profits, with many just breaking even.
The first and perhaps most devastating effect on property became apparent to me between 8 o’clock on Sunday morning, and 11 o’clock Sunday evening.
No less than 12 – it may have been 13 – Owners of Bars, Clubs and Restaurants phoned to ask how they are going to manage through a crisis, the likes of which have never been seen before in the industry.
Turnover drops were reported between 65-90%, the latter being one of the busiest and most exclusive West End venues.
‘Are we going to pay our Rent on the Quarter day?’ they asked, and ‘How are we going to afford to, because cash flow is tight’. This problem exists even before the Government bans large gatherings, whereby the larger venues will have to shut for an indefinite period.
Sensible Landlords will want to maintain their income, and as I see it, ‘we are all in this together’.
I have specialised over a period of 5 decades in corporate recovery during recessions, where over-rented Tenants would have gone bust, if Landlords did not come to the table and discuss sensible resolutions going forwards.
Surely, Landlords cannot expect their Tenants to keep their premises open, when the staffing and product costs are greater than their income.
The main advice we give to our Clients, is do not avoid the issue of non-payment of Rent, and in the same way as you address every other cost cut, speak to your Landlords, because they might want to retain you in the long-term, and help you in the short-term, instead of getting the premises back through a liquidator.