Government urged to 'step up' and deliver rent-free period for hospitality businesses

By Stefan Chomka contact

- Last updated on GMT

Government urged to 'step up' and deliver rent-free period for hospitality businesses

Related tags: Coronavirus, Restaurant

The Government is being urged to introduce a nine-month rent free period to help businesses that have been forced to close due to the Coronavirus pandemic.

Mark Selby, CEO of Mexican restaurant group Wahaca, says that a rent-free period is essential to help businesses that are closed and not taking any money but which are still being crippled by rent demands.

“The big thing that’s still needed is a nine-month rent moratorium. A rent-fee period that needs to really help businesses because the cash demands of the rent when you’re not getting any income is absolutely crippling to every business.

“We really need the Government to step up and deliver that final bit.”

Selby says that landlords should also be protected by the Government so that they can, in turn, stop putting pressure on their tenants. “Importantly, we’ve got a lot of landlord that are very scared,” he says. “Some are being overly aggressive and some are being fantastic. They need to be looked after as well, it can’t just be us.

“The landlords need an interest-free period on their properties. All these are huge asks and completely exceptional circumstances but they are 100% necessary to save the [hospitality] industry.

“Landlords need to having conversations with the banks. Banks need to understand [the situation] and will understand in time. We’ve got to put pressure on the banks and the Government, we all need to get there otherwise you’re not going to have anyone in your sites for the next two years if you don’t start thinking about that.”

A rent-free period is a key target of London Union’s Jonathan Downey, who is calling for a nine-month national rent free period. “The broad brush plan is to push back the next nine months of rent (April-December), so that nobody pays anything until Q1 2021, when rental payments start as normal again,” he says.

“To make up for this period of rent-free, each corresponding lease is extended by nine months so that those payments aren’t lost, just postponed. In order to help landlords manage this loss of income, we need to do the same push back for them on the next nine months of their loan repayments, where the debt is secured on premises benefiting from this rent postponement.

“Like the 12-month business rates break, it should probably be sector specific - retail, leisure and hospitality only perhaps.

“It’s like every payment on (certain sector) commercial premises is put on pause until 01 January 2021 when someone famous presses ‘PLAY’ on a big green button from a platform in Trafalgar Square at midnight on New Year’s Eve. And off we all go again.”

Downey called for a six-month debt enforcement moratorium as part of original six-point list of actions required from the Government to help the hospitality sector. This, he says, would stop landlords putting pressure on tenants and give businesses some additional breathing space against litigation, foreclosure and other enforcements of security.

Of those six original points, five have since been met by the Government, including introducing a lease forfeiture moratorium and launching a loan fund.

“We’ve got five out of six so far and in some cases we have done better than expected,” says Downey. “We now need a new list of next measures that we will need to get through this.”

Related topics: UnitedWeStand

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