Forum attacks high pub rents

Pub property managers have hit out at leisure developers who expect high rents from pub operators, but have a poor understanding of their business.

At a recent Property Forum, organised by Richmond Events, pubco representatives criticised the owners of developments during a heated debate at one of the seminars, called "Leisure trends: finding a win-win solution for stakeholders".

The boom in out-of-town leisure developments has led many pub operators to rent sites from developers. But they claim that in many cases the rents are too high and developers have overlooked problems associated with the sites.

Tom Cobleigh property director Keith Bennett said that developers had little sympathy for the difficulties of day-to-day pub operation and treated them the same as other retail outlets, such as shops.

Tom Cobleigh has a pub site at an out-of-town retail park in Croydon, where Mr Bennett estimates that a noisy nightclub is costing Tom Cobleigh £10,000 in lost income. He said he would not have chosen the site if he had known this.

"My site selection criteria have changed. I'd now go for a corner outside the scheme and not in the scheme itself," he said.

But speaking for developers, Toby Baines, group managing director of Citygrove Leisure, blamed the high rents on the rise in the cost of land, saying it was impossible to keep all parties happy.He added: "Everyone gets greedy, so the perfect scenario doesn't work. The problems are that the price of land has rocketed, there's been hasty decision making by both landlords and pub operators, and all of us have not been doing our sums right."

Mr Baines also admitted that, once a site has been prelet to a pub operator, liaison between developers and the operator is often poor.

Investors in such schemes admitted they also failed to appreciate the difference between pub operations and other retail outlets. Speaking for investors, Simon Radford, director of property at Atlantic Fund Management, said that there was a need for fund managers to apply different criteria to leisure operators.

The Property Forum included more than 400 delegates from sectors including pubs, retailers and other leisure operators who met on board the cruise ship Arcadia.