A Taste of Success Live & Let Live
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Leisure Property Specialists On Market Should I stay or A taste of success Live & let live should I go? A guide through the process of New recruit Richard Thomas A look at the UK’s music venues renewing a commercial lease. dissects the restaurant market. and live music scene. Page 8-11 Thriving in uncertainty In this issue Should I stay or should I go? 6-7 A taste of success 18-19 Phil Smith guides you through the process of Richard Thomas explores some of the thriving renewing a commercial lease. businesses in a turbulent restaurant market. Restaurant Case Studies 20-21 Thriving in uncertainty 8-11 Pub Sales – A multi layered market 22-23 Director and Head of Hotels, Paul Hardwick, Director of Agency, Simon Hall, looks at pub analyses the latest UK hotel data. transaction volume across the North. Hotel Case Studies 12-13 Pub Case Studies 24-25 Page 14-15 Make hay whilst the sun shines Make hay whilst the sun shines 14-15 Live & let live 26-29 Rosie Hallam looks at strong Net Initial Yields in Kevin Conibear takes a look at the evolution of these uncertain times. the music industry across the UK. Investment Case Studies 16-17 Leisure Case Studies 30-31 Page 18-19 A taste of success Page 22-23 Pub Sales – A multi layered market Page 26-29 Live & let live Important notice: Unless otherwise stated, all properties for sale or to let, have or are being dealt with on a Sole Selling Rights basis. The prices and other particulars regarding properties are correct at the time of going to press, November 2018. As prices can be altered by the vendor at any time, interested potential buyers should check the latest position with Fleurets before viewing. The information contained in this publication should not be relied up and is not to be reproduced in whole or in part without the expression permission in writing of Fleurets Ltd. © Copyright - Fleurets Ltd. 2018 London. ‘All rights reserved’. 2 Cover image: Lorem Ipsum 3 A kick of caffeine The performance of JD Wetherspoon, Stonegate and the vast majority of traditional tied pub tenants across the country should not go unnoticed. Graeme Bunn Managing Director Much like 1976, 2018 will live long in the memory and be referred to over the years and decades ahead during weather forecasts and climate change documentaries. Although the trading performance of wet-focussed pub operators may not last quite so long in people’s memories, the performance of JD Wetherspoon, Stonegate and the vast majority of traditional tied pub tenants across the country should not go unrecognised. JD Wetherspoon delivered However, it remains unclear as to The property market itself has column inches. Whether the deal 5.5% like-for-like sales growth (LfL) over the 13 weeks to 28th whether the worst is over for this experienced a comparatively buoyant means we will see Costa explode across October, whilst Stonegate delivered 4.6% LfL over the 40 weeks sector of the leisure property market. and healthy period, with notable the globe is unclear, but a more direct to 1st July. Similarly, Ei Group reported net income growth of 1.3% The issues of rising costs in relation transactions across the pub, restaurant consequence is likely to be further over the 47 weeks to 25th August, it being quite clear that the to food supplies, business rates, rent and hotel sectors; The Restaurant investment and growth of Premier warm weather drove us all to quench our thirst in pub beer gardens and labour remains as prevalent now Group (TRG) being particularly Inn as Whitbread use some of the across the country. as they did 12 months ago. The issue active, picking up Food and Fuel (11 disposal proceeds towards accelerating of labour supply is likely to become the leaseholds in London) for £14.9m, investment in the hotel brand. The warm weather coincided with the FIFA Football World Cup most concerning of these issues in the quickly followed by the agreement to which provided a trading bonanza for sports focussed venues. year ahead as net migration to the UK purchase Wagamama (133 restaurants The months and year ahead is likely to Stonegate achieved LfL growth of 19.2% during the World Cup, from other EU countries continues to in the UK, plus 63 worldwide) for be both challenging and exciting for with 4.5 million pints sold during the tournament. Personally, I am fall. As a result, this may lead to wage £357m in cash, in addition to the leisure property owners and operators not sure that England’s achievements at the World Cup were that growth as operators throughout the existing debt of £202m. The acquisition alike but, as ever, I am optimistic that notable, a record of played 7, won 3, lost 3, drew 1, would only leisure sector find securing good quality of Costa by Coca Cola, however, stole the conditions are right in the sector for amount to mid-table obscurity, but that debate is for another day. It candidates more challenging. most of the headlines and numerous success. is clear that all wet-led pub operators should give Gareth Southgate one on the house should he pop in! Stonegate Whilst the executives of the wet-focussed pub operators have been collectively patting themselves on the back, their counterparts over Leisure Property Specialists in the casual dining sector will have been fervently playing with Fleurets On Market their worry beads and asking whether 2018 can get any worse. The last thing that the likes of Prezzo and Carluccio’s would have Published by Fleurets Ltd wanted is a record breaking summer. 4 Roger Street, London WC1N 2JX Enquiries: Lizzie Hawes - PR and Marketing Manager T: 020 7280 4745 E: [email protected] W: fleurets.com/onmarket 4 fleurets.com fleurets.com 5 w Commencing ’54 Act proceedings: Should I stay Landlord Tenant 12 months before the contractual expiry at the earliest, the landlord or tenant’s solicitor may serve Notice to end the existing tenancy. The existing tenancy continues until Notice has been served specifying an expiry date. or should I go? The tenant’s solicitor must register a claim for a new lease with court before the expiry date of the existing tenancy as stated in the Notice. Failure to do so will result in losing rights of renewal. 18-24 months before lease expiry instruct a surveyor to advise on the market rent and formulate a strategy. Landlord Tenant Section 25 Notice Section 26 Notice Landlord Tenant Do you intend to Do you want to renew Landlord Intends to Oppose Renewal Landlord and Tenant Intend to Renew renew or oppose? your lease? To oppose, the Landlord must either: To renew, in the Section 25 or Section 26 Notice: In their Section 25 Notice, state the Section Propose terms for the renewal in the Notice. 30 ground on which they intend to refuse a Step one is to establish: Engage their surveyor to negotiate the market Philip Smith new lease. Is the lease protected by the Landlord & Tenant Act 1954? rent and terms for the new lease. Divisional Director Within two months of receipt of a tenant’s Section 26 Notice, respond with the ground The fall back is a renewal on the existing terms under S30 on which they intend to refuse a at market rent. Facing a lease expiry can be a daunting No Yes renewal. Rent at renewal can go up or down. prospect with an uncertain outcome. Excluded Lease Protected Lease Philip Smith, specialist in Lease Consultancy, guides both landlord Excludes renewal rights granted The tenant has rights to remain in and occupier through the process of under the `54 Act. occupation after expiry. Section 30: Grounds of Refusal DEAL NO DEAL renewing or refusing a renewal of a The tenant has no rights of Entitled to a new lease based on the commercial lease, under the Landlord No occupation after expiry. terms of the existing. a) Persistent breach of repair. & Tenant Act 1954. No recourse to court if agreement Landlord must satisfy legal grounds to b) Persistent delay in paying rent. cannot be reached. refuse a new lease. c) Other substantial breach of covenant. As this process map demonstrates, Recourse to court if agreement d) Landlord has offered alternative accommodation. the lease renewal process under the Landlord can take back possession for cannot be reached. e) Uneconomic subdivision of the premises. Heads of Terms agreed. `54 Act is complicated. Involvement any purpose. f) Premises are required for redevelopment. New lease completed. of courts, solicitors and surveyors g) Owner occupation. may seem daunting but, nevertheless, with the landlord and tenant aiming to secure the future use of the property, Action If yes - proceed to opposite page it is a pivotal event in a property’s life Dispute Resolution cycle and it is vital to be on top of the process. Tenants with excluded leases need to Remedy or Compensation act sooner rather than later. If the tenant does not accept the landlord’s grounds for refusing Grounds A-D can usually be remedied, a new lease, or if agreement of the lease terms or rent cannot be As ever, it pays to take early advice; We advise instructing a surveyor to which could avoid a renewal being reached, the dispute will be resolved by a court hearing. Fleurets’ nationwide team of Lease engage with your landlord well ahead opposed. Consultancy professionals have the of lease expiry if you wish to renew. Determination of rent at court involves surveyors providing Expert expertise to guide you through the Witness evidence and the outcome is determined by a judge.