BDMs are 'weakest link' in setting rent

Business Development Managers (BDM) are the "weakest link" in the rent-review process and should be replaced by qualified chartered surveyors, says one expert.

Surveyor David Morgan, of Fair Pint, made the call as the Royal Institution of Chartered Surveyors (RICS) agreed to study if the way pub rents are set is fair, after criticism from the Business and Enterprise Committee (BEC).

RICS has invited interested parties to attend meetings in August to explore how it can assist in the process of rent calculations. The outcome will be fed back to the BEC. RICS issues guidance on how pub rents should be set, but was accused of acting as gamekeeper and poacher, as members sell pubs for pubcos and work as witnesses and arbitrators on cases.

"The logic is supplied by RICS, but the ones actually doing the calculations at the coalface are the BDMs who just aren't qualified," said Morgan, boss of Cookseys DMP. "The weakest link in the whole affair is the BDM. I would say about 95% of confrontations are bought about because the BDM is unable to explain the calculation.

"There are all manner of shades of grey in the process, from expenses to GP margins, and they're not qualified to act on that."

Martin Willis, Fleurets MD and chair of RICS Valuation Group, said: "The reality is a chartered surveyor understands the laws and processes, but you can't dictate how companies should operate. No other sector has that. If Punch has around 1,000 rent reviews a year, having a chartered surveyor for each one would be very costly. Pubcos need to look at how chartered surveyors can assist them in training BDMs."

But trade expert Phil Dixon said: "The BDM has the personal relationship and knows the pub inside out. I have seen relationships break down because a chartered surveyor has come into the pub for the first time and told the tenant he is under-trading."