New Code Of Practice For Commercial Property Released

Putting pressure on the government to keep assisting the hospitality industry is becoming vital.

There are many issues facing our industry currently and putting them in order of importance is frankly impossible. However, many of them come back to one issue, rent.

It is the most talked about issue in owner/operator groups and for good reason. Throughout hospitality the biggest fixed cost is almost always rent. Being a fixed cost it doesn’t go down if you are closed, or if revenue is down.

During lockdown some lucky venues have been given rent reductions or deferments but very few have been given rent holidays. This all means that during lockdown most venues have either been paying out rent without any/very little income or accruing debt that needs to be paid when they reopen.

On top of this there is the issue that when we eventually reopen customer numbers and therefore revenue will be down. There are many reasons this will happen be it social distancing, general financial worries, uncertainty in going out etc, but it is going to happen. We don’t know how badly, and we don’t know for how long, but in some way there will be repercussions on revenue.

Some costs can be altered to compensate but not rent. At least not yet.

Some have tried to lobby the government, currently with no results. A new Code of Practice has therefore been released by Tenants and Trade Associations and concerned citizens. It aims to ‘assist with the current impasse in rent discussions between Landlords and Tenants brought about by the COVID-19 crisis’.

We are by no means experts in this field but it appears to us to be a very fair and measured document which takes on board the issues from both the tenant and landlord sides as well as understanding the government can’t just give indefinite support with so many unknowns out there.

The Code of Practice represents:

  • The desire of businesses in the retail, leisure and hospitality sector to support a recovery of the UK economy while minimising the burden to the taxpayer.
  • A way to protect the millions of jobs and the communities served by the businesses in these key sectors of the economy throughout the United Kingdom.
  • A way for all commercial tenants to talk with their landlords, as equals, fairly and in good faith.
  • The willingness of businesses to ‘share the burden’ of the economic impact of the Covid -19 pandemic proportionately.

The full document can be found here.

This is a reminder that everyone can help, in this case by pressuring your MP. You can send them an email (they make it remarkably easy at this website), you can link to this Code of Practice (or another if you prefer it), you can make difference. This rent issue will benefit everyone in our industry, it will reduce costs and give owners and operators the ability and funds to focus their attention where it needs to be focused – their staff and the rebuilding of confidence in our industry.