Ei Group publicans get the option of two new agreements

By James Wallin

- Last updated on GMT

New deals: Ei Group is offering eased and tenanted division licensees two different 10-year agreements
New deals: Ei Group is offering eased and tenanted division licensees two different 10-year agreements

Related tags Ei publican partnerships Leasing Renting Contract Mro

Ei Group (EiG) is to launch two new agreements into its leased and tenanted division, the company revealed this week.

The two 10-year tied leases will “imminently” be available on the open market, Ei Publican Partnerships (EiPP) managing director Nick Light said.

The first is an Investment Lease, which utilises the clause in the pubs code that waives the market-rent-only (MRO) option. The lease will be accompanied by an investment deed, in which EiG commits to invest a minimum of twice the rent in the pub in return for a waiver of the MRO option at the five-year point.

Investment in leased and tenanted estate

Light pointed out that EiG is due to spend £40m in capital expenditure across the leased and tenanted estate this year.

The second agreement is EiG’s Incentive Lease, which includes two payments at the end of the term if barrelage targets have been met – one equivalent to a year’s profit and another equivalent to £20 for each barrel of beer purchased during the period. Under this lease the five-year rent review has three options: MRO; annual indexation in line with the consumer price index; or an open-market review, adjusted upwards or downwards.

Atypical leases

Light said both leases were also atypical in that rent and service charges could all be paid weekly.

He said: “We recognise that critical to our success is the attraction and retention of great publicans and, notwithstanding the ambitions we have to grow our managed estate, EiPP will continue to be at the heart of our business. So, having occupational agreements that can motivate, retain and encourage investment from both parties is something that is really important to us.”


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