However, to qualify for the free rent and reduced rate, publicans will have to add five years to their current lease.
Wellington, which has more than 700 pubs, is owned by the Reuben Brothers and managed by Criterion Asset Management. In May 2019, The Sunday Times Rich List estimated the family had a net worth of £18.66bn.
Licensees previously told The Morning Advertiser of their despair about a lack of communication from the group.
The company posted a statement on its website, dated 14 May 2020, which said: “June invoices have been raised in accordance with lease/tenancy agreements and other legal requirements, notwithstanding the company’s position remains as detailed below.
“We wholly appreciate the anxiety and indeed concern shared by publicans across the country. We value every single one of our tenants and are determined to work with them through this unprecedented crisis.
“We have already confirmed Wellington will not be taking any action with regard to rent arrears that may have arisen since the start of the Covid-19 crisis and the shutdown of businesses across the UK.”
It went on to say, post the crisis, it would be working with its tenants on an individual basis to support them and agree a mutually satisfactory outcome that keeps pubs open and tenants successfully in business.
It added: “As you can appreciate, this is a challenging target, but we can assure you we have a dedicated and experienced team in Criterion, who are committed to working hard and supporting our tenants through this crisis.
“As such, we want to take this opportunity to be absolutely clear that we want to work together with our tenants as we do not want to see them lose their businesses solely due to the Covid-19 crisis.
“If it becomes clear, during the course of discussions with individual tenants, that they will be unable to meet their rental arrears arising during the lockdown period, then we will not look to pursue these.
“As part of these discussions, we will seek to support our tenants by offering a three-month rent-free period, as appropriate.”
The statement outlined how the group has a broad range of tenants across its estate and said this was why a case-by-case approach was required.
It also said: “Wellington Pub Company, as a business, also has obligations in the form of a securitisation for which, payments must be made quarterly.
“Just like our tenants, we eagerly await further news from Government in respect of when restrictions to the industry will be lifted.
“We hope this gives everyone some comfort to plan ahead and build for the future.”
Alison Ward-Baptiste, licensee of the George pub in Bradford-on-Avon, Wiltshire, has been offered three months’ rent free and the next two quarter payments at half rent but, she was worried about being able to afford to pay any rent as she was concerned about trade levels upon reopening.
She said: “We don’t know how we are going to reopen, if we reopen on 4 July – if we are allowed –how is our turnover going to be?
“Can we actually afford 50% rent from 1 September? In the winter months, because it will be more enclosed, the weather is inclement so we won’t be sitting our gardens as much in September.
“Pubs with small areas who can’t socially distance will be stuffed.”
Ward-Baptiste also said Wellington will only offer the reduced rent if licensees agree to a five-year extension on their lease, with a personal guarantee.
She added: “If you don’t agree to a five-year increase on the lease, you have to pay the rent. You can’t do three months rent free and then walk.
“You have to have three months’ rent free and five years on lease, if you won't have the five years, they want the rent.
“Five years is massive. Especially when you personally guarantee it, you can’t get out of that. That is 20 years left on my lease. We are obviously not going to stay here forever, we sell our business and someone buys it then defaults on the rent, we are liable until the end of the lease and they will chase you for that and will take your house off you so when you’re in your 70s, you’ll lose your home.”
Merlin Griffiths, who runs the Maltsters Country Inn, in Badby, Northamptonshire, said he wanted to see his pub do well again and the offer of a rent-free and reduced rent period was encouraging.
He added: “I love my Wellington pub, it’s my home in a vibrant community, I want to see it thrive again. In order to do so, without further Government intervention, the eternal optimist in me sees a time when my landlord, Wellington Pub Company, backs their tenants fully regarding rental, and ensures the longevity of my business.
“Given the lack of enthusiasm from many landlords to really get behind their tenants, it was encouraging to get an offer from Wellington this week. I truly believe they want to help, but if they do, the package offered will have go further.”
Griffiths went on to say this was an opportunity for the pub company to do right by their tenants amid the crisis.
He said: “There is a real chance here for Wellington, part of Criterion Asset Management, to be the heroes in this growing issue of rent for pubs and other small businesses. I trust they will embrace it by backing their tenants fully, setting the industry standard for landlord support and simultaneously protecting the livelihoods of their tenants and adding value to their future lease propositions by doing so.
“In order for this to happen, I believe a flexible and open discussion with their tenants needs to happen, and soon. The single biggest starting point I would most like to see though is a commitment to “no rent while closed”. And then additional rental support moving forward.
“That first simple commitment would enable me, and I’m sure all of their other tenants, to collectively breathe a sigh of relief and allows us to focus clearly on the task at hand in agreeing a reasonable level of support for reopening, and weathering the oncoming recession the Chancellor has warned of. The campaigns #NationalTimeOut and #FAIR4Hospitality both propose innovative, simple and workable solutions too.”
Griffiths had an optimistic outlook on how the pub company will progress with the support is has offered.
“A successfully supported estate full of happy tenants, ready to tackle the business problems of the future (and, of course, keep rental revenues flowing) is the Utopian outcome. I do believe it is possible,” he said.
“On Wednesday 27 May, I received a brief note from Jamie Reuben (son of Simon Reuben – one half of the Reuben brothers) directing me to the estate manager for further discussion and ‘hoping it works out well’. I look forward to taking this forward.
“As a community publican, a cheerful outlook is my default mood, my glass is half full. So, thank you Wellington for opening the door to discussion because it is through us working together that the best solutions will be found. Let’s raise a glass to being able to raise a glass again please.”
Another tenant, who has asked to remain anonymous called for more flexibility on the reduced rent for two quarters.
They added: “The principle is good but we want to discuss it a bit more. We don't understand that if they can give us rent free while closed from 1 June, why can't they give us rent free from 22 March, when we have been closed and had no income?
“A lot of people have paid that rent, some are on monthly tenancies, some part-paid March, it just seems odd. I’ve got no money left so I don’t know where the money is meant to come from.
“I can’t borrow any more, I’ve borrowed up to the limit and that is all used up.”
When it came to extending the lease for five years, the tenant said this would work for some but not for others.
They said: “Someone at the end of their lease, with a few months or a year to go, do they really want to get into it for another five years?
“Their mode of communication since this crisis has been one of ‘we want to work with you, we don’t want to see you going out of business now or in the future’ and in order to achieve that, they need to listen to us and discuss things.
“That’s not what we are getting from a couple of the Criterion representatives. Their actions don’t match the tone of their statement.
“The offers we have received is a starting point, we hope to move on but we are finding it difficult because they are saying ‘take it or leave it’ at this point in time and not really understanding the scale of it.”
The Morning Advertiser contacted Wellington Pub Company and received the following response: “We are engaging with tenants but, given the varied nature of the Wellington estate, offers vary between tenants and each of those conversations are strictly confidential so we cannot comment further.”
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