BensGrandad
New member
Crookie; Have they now removed the upward only rent review clause in their leases. I left the lease side of the business in 1995 and retired in 2001.
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Landlords will be able to buy their beer on the open market...
- Thread starter Bozza
- Start date
seagull 1979
Praying for points
BG - Not in all cases, it might be different for [MENTION=1162]Cookie[/MENTION] if he is a single site lease but as a multi site operator its still a factor for us.
crookie
Well-known member
We are a single site lease, and they must have removed it as our rent was definitely reduced, albeit not by much. My brother lives on site and he handles the negotiations as I have other businesses, so apologies for not being 100% sure on that.
We did intend to go to a rent review if they had sought to increase the rent, but as they didn't, we didn't do that.
The upward only rent review clause certainly was in the lease we signed in 2004, the lease was a 20 year one drawn up in 2001, an old Laurel Pub Company lease who Enterprise obviously must have bought out. We bought the lease in 2004
BensGrandad
New member
This was one of my biggest complaints as we lost 80% of our target custom and their attitude was tough then penalised us for not hitting barrelage.
crookie
Well-known member
They are a horrible bunch. What is interesting is that they don't even own our building anymore, it is one of about 20 they sold off and leased back a few years ago, so not sure what will happen. If they aren't making money from us on the beer tie, will the market rent be enough for them to pay the lease they agreed with the new owner ? How long is that agreement for ? There could be a lot of confusion and disruption, in cases like ours. I guess if Enterprise can't afford to pay they will have to hand the lease back, and we will have to come to an agreement with the freeholder for a market rent. We do about 15 kegs a week, so at an average of £70 a keg over market prices, that frees up about £1000 a week to pay more rent/reduce prices/make more profit
BensGrandad
New member
Without this latest news Enterprise are in financial trouble loosing millions and looking for a buyer.
seagull 1979
Praying for points
Enterprise are renowned for being the worst at spiking the rent if you start to show any sign of making your business a success by increased revenue and daring to make any sort of profit. They are the considered the devil of the industry by many people I meet
BensGrandad
New member
They took over Inntrepeneur in name only and continued to operate in the same manner.
crookie
Well-known member
Couldn't agree more, any profit resulting from your hard work they can't wait to get their grubby paws on, but go to them with a hard luck story, or expect them to invest anything in their building without massive payback, they aren't interested
seagull 1979
Praying for points
There formula is and has been shot for sometime.. yet I still kept meeting people who were foolish enough to believe that they could win and make it work, whilst it is possible to make good profit on a rent deal that is linked to revenue it must follow a scale that is set from a base level and goes up and down according to turnover. Make hay whilst the sunshines and hope its a great summer!
Lower West Stander
Well-known member
One thing you're all forgetting here is that generically speaking pub performances have been improving as the economy picks up whilst both Enterprise and Punch have undertaken some considerable financial engineering to restructure their debt. Punch in particular continues to sell pubs at above book to reduce a debt burden which has already been considerably reduced.
Because of their restructured balance sheets, neither Enterprise or Punch are under as much pressure from the beer tie as they were. Sure they will need to jack up rents (which they can do unless legislated against) but I think the landlords will be better off as a result - although not as much as I think was hoped for.
One other thing to mention here is that legislation could still be a very long way off. We've got an election coming up whilst the pubcos will probably do a fair bit of lobbying work. I don't want to be a portent of doom as I think landlords tied to pubcos have had a really rough time - but I think any improvement in their circumstances will be modest.
Because of their restructured balance sheets, neither Enterprise or Punch are under as much pressure from the beer tie as they were. Sure they will need to jack up rents (which they can do unless legislated against) but I think the landlords will be better off as a result - although not as much as I think was hoped for.
One other thing to mention here is that legislation could still be a very long way off. We've got an election coming up whilst the pubcos will probably do a fair bit of lobbying work. I don't want to be a portent of doom as I think landlords tied to pubcos have had a really rough time - but I think any improvement in their circumstances will be modest.