Pub companies announce lockdown rent plans

By Emily Hawkins contact

- Last updated on GMT

Related tags: lockdown, Coronavirus, Health and safety, Legislation, Property

Pub companies including Greene King and Stonegate Pub Company have confirmed rent reductions for tenants to 10% for the second lockdown period.

Marston's and Admiral Taverns were also among those to inform tied tenants and leaseholders their rent would be reduced from 5 November until 2 December.

Pub companies had already offered rent discounts to sites in tier three areas, where pubs had to close unless they could serve a "substantial meal" with alcohol.

Greene King has said its tied pub tenants in England will receive a 90% rent discount from 5 November to 2 December.

Greene King Pub Partners managing director Wayne Shurvinton wrote to tenants to say the discount would apply even if a pub chose to do takeaways.

Standing shoulder to shoulder

The letter said: “All of us hoped that this day would not come and there are no words that can adequately describe how it feels right now to be back in this position again. However, first and foremost I wanted to update you on Greene King Pub Partners’ support for you during this initial closure period.

"We remain committed to providing industry leading support and standing shoulder to shoulder with our tied partners to support you as much as we can."

Stonegate Pub Company has offered those within its leased and tenanted business, Ei Publican Partnerships, rent credits of 90% for rent.

It also said it will offer tie release fees and fixtures and fittings rental charges for all tied publicans operating substantive agreements in England.

This support will be for the lockdown period and is part of an overall package of more than £42.5m, the pub company said.

Changing landscape

Nick Light, managing director of Ei Publican Partnerships, said: “We continue to stand by our publicans, and we are taking the responsibility of supporting our businesses very seriously as the trading landscape continues to change. Once again, the hospitality industry is being told to bear the financial brunt of further regulations in the Government’s response to Covid-19.”

Like many in the sector, Light expressed concern over a suggested ban on takeaway pints. The Government partially U-turned on this by stating pre-ordered drinks would be allowed under new lockdown laws.

Marston's joined Greene King and Stonegate Pub Company in reducing rent for tied tenants and leaseholders to 10%.

In a letter to tenants, Ed Hancock, operations director said: "Clearly no one wanted to be back in this position, I know how hard our pubs have worked to make sure they remain safe and enjoyable places for their customers to visit. I also know the determination and creativity that our pubs have demonstrated over the last nine months and I have no doubt that our business will bounce back from this most recent enforced closure."

Domestic rent

Admiral Taverns confirmed to The MA​ tenants will have to pay 10% of their contractual rent for the 28-day closure period.

Its policy states: "Where a pub is forced to close, the rent payable for a closure period of up to 28 days will be 10% of the contractual rent, equivalent to ‘Domestic Rent’ (unless there is no domestic accommodation, in which case no rent will be payable). Licensees will continue to pay for buildings insurance and the service charge which ensures building compliance, which we will continue to deliver whilst abiding by Covid Working guidelines.

"If a closure period extends beyond 28 days, Admiral Taverns will review all grant support available to you as licensee, and work with you to determine an affordable rent in this light. We will assume that all available grant support has been accessed by licensees and our BDMs and Head Office staff will make themselves available to support you in any way we can, to help apply for and receive this funding."

Star Pubs & Bars will cancel rent for its pubs on core leased & tenanted agreements during the four weeks in November, regardless of whether or not they choose to operate a takeaway service.

It will offer a 90% rent reduction should the lockdown continue beyond the initial date and will review its support for pubs under local restrictions.

Extremely frustrating

Lawson Mountstevens, Star Pubs & Bars managing director said: “This second lockdown is devastating for pubs throughout England and the on-trade as a whole. It is also extremely frustrating given the time and money spent making pubs safe, and the corresponding very low levels of infection currently linked to pubs.

“From the outset of this crisis we have said that we will continue to review our support in line with the changing regulatory landscape, and hope the actions we’re taking today allows for some surety in these very uncertain times. Clearly we all hope that pubs will reopen on 2 December as the run-up to Christmas is such a critical trading period for the industry.”

Punch will provide its tied tenants in England with a 75% rent credit for the closure period and invest in outside space in preparation for reopening.

Punch chief executive officer, Clive Chesser said: “The Prime Minister's announcement on Saturday night was a bitter disappointment and a further nationwide closure will undoubtedly create further challenges and anxieties for our teams and our pubs.

"The Government grant support and the extension of the furlough scheme are welcome news, but it is essential that the grant payments are made available to all of our publicans as quickly as possible. As the industry recovers from the impact of the ongoing crisis, longer term Government support for the sector will be essential.

"We have continued to provide a dynamic support package to our publicans, most recently adapting the level of support to those pubs impacted by movements in the tiered systems and local closures imposed in England, Scotland & Wales. As we head towards a second national ‘lockdown’ in England we have communicated to all of our tied pubs in England that we are providing a 75% rent credit which will remain in place throughout this period of full closure. 

"Alongside this we will be investing in the outside areas of hundreds of our pubs across the UK during the month of November to adapt & improve external areas in preparation for safely re-opening and optimising trade through the Christmas period.”

The Morning Advertiser​ has asked other major pub companies what their plans are for rent and will update this article accordingly with responses.

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