As Prime Minister Boris Johnson sets out his campaign for people to return to work, many employers are maintaining a status quo in home working. This leaves restaurants, pubs and cafes in high streets and side streets up and down the country all too sparsely occupied.
With social distancing and other safety measures being applied in workplaces, the capacity of workplaces is diminished. The past three months has seen most employers adjust to home working and for many it is working well. So, there will not be a rush back soon.
This is certainly a predicament for the Government as their focus currently is to get the economy moving, and that means people moving. Travelling to work and feeding local economies with footfall.
Home working isn’t for everyone but for millions it has become the norm. If they are comfortable with that, and their employers are too, it will take quite some choreography from Government to shift them.
The preparation for a return to the workplace from the perspective of contract caterers operating food and drink outlets is ongoing. Major changes are taking place and for caterers, workplaces and the workers catered for, to ensure a return to work is safe. As workplace catering adapts and adjusts to new operating processes, a valued food and drink experience would help see more people return to work.
Footfall in all major cities and towns across the country is down and shows no sign of recovery soon, but landlords and councils have not adjusted rents and rates accordingly.
The rent and rates value is based on many different elements, but most have one thing in common, the delivery of regular and reliable footfall. Location will also play a big factor in determining the footfall demographic, so if you want to open a restaurant in Mayfair you pay the price, or the going rate.
The going rate has to be evaluated from demand and constant delivery of that demand, and every location in every part of the country has seen demand and delivery evaporate.
The ongoing disputes between hospitality businesses and landlords has seen many hospitality businesses evaporate into administration, just like the footfall they depend on.
It could be said, and we are saying it, landlords and councils need to reset a valuation on their rents and rates to reflect the footfall their real estate delivers. Otherwise they are expecting hospitality businesses and others to pay for their rent and rates based on outdated and no longer valid prices.
Both sides are suffering, and neither is in any way responsible for what is happening, but unless they work together to find a balance, the alternative is worse for both.
Market forces will force tenants out of business, they will be unable to pay rent and rates, and the real estate location values will spiral downwards, attracting no new tenants. Landlords like Intu, now in administration, are an example of imbalance with too much space and not enough footfall to attract tenants.
A rent and rates reset is much needed for all parties, and it needs to start soon.
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rent and rates imbalance – 16 July 2020 – rent and rates imbalance