Greene King slashes rents for its pubs by 90 per cent
Greene King is to slash rents for its publicans by 90 per cent while pubs are closed.
The concession will apply from June 11 until four weeks after the pubs have reopened. At that point, 50 per cent rent concessions will be offered for a further four weeks.
The company said this means support will last until at least September.
The offer, which the Bury St Edmunds-based company described as a “multi-million pound investment”, comes amid the growing #nopubnorent campaign on social media, pressing pub companies to cancel rents while their tenants cannot operate amid the coronavirus crisis.
Many publicans have warned they risk going out of business unless more help was forthcoming.
A ministerial taskforce is examining how and when pubs can be reopened. It is thought those with outdoor spaces and gardens may be able to open first during the summer, with the government hoping some elements of the hospitality industry will reopen in July.
Prior to Thursday’s announcement (May 21), Greene King had deferred rents dating from March 17, and had held “one-to-one conversations” with all its 975 tenants - many of them in the Cambridge region - to understand their financial situations.
About £4million of rent concessions had been offered to June 10 through support to tied tenants, the company said.
Greene King asked those pubs in receipt of government grants of up to £25,000 - which covers those with a rateable value under £51,000 - to use the money to pay fixed costs, such as rents. But #nopubnorent campaigners argued this would leave publicans with large deferred rent bills that could lead to closures.
Jo Tomkins, publican at The Corner House pub in Cambridge, a Green King pub, told the Cambridge Independent that they expected a £15,000 deferred rent debt by June 1 - which would take years to pay back.
Speaking prior to Thursday’s announcement, she said publicans expect to pay their domestic rent for living above a pub, but added: “I don’t think pubs should be charged any commercial rent for the time that they can’t trade. Pub rent is based on FMT – fair maintainable trade. We have no maintainable trade.”
Greene King’s new position moves much closer to that position.
Wayne Shurvinton, managing director of Greene King Pub Partners, said: “From the outset balancing as much support for our tenants as we possibly could alongside ensuring the long-term survival of Greene King has been our priority.
“By deferring rents before pubs were ordered to close we removed any immediate cashflow concerns for our partners and since then have reassured them that we would support them in every way possible when it came to rent and I’m very pleased to announce these latest measures today.
“None of us are immune to the financial implications of pubs closing and we all have to work together to survive this existential threat to our industry. I’m grateful to every single one of our tenants who has worked with us and trusted that we were doing all we could to look after them.
“We feel we’ve played our part and it is critical the government continues to play its part in supporting our sector. The support so far is extremely welcome but as a tenant ourselves with over 500 landlords, we have not received rent concessions in the way we are offering them to our tenants and further support on rent payments is needed to support the recovery of the pubs sector.”
Greene King has also pledged to replace for free with fresh stock all the unopened kegs and casks that would be out of date and unsaleable in its partners’ pubs, at a cost of about £1.3million plus VAT and paid for all tied pubs to be members of the BII (British Institute of Innkeeping), an independent body.
Greene King’s announcement follows a package of support announced by Britain’s biggest pub landlord, Stonegate Pub Company, on May 14 for pubs within its Ei Group.
The package includes rent credits or trade credits, along with the cancellation of tie release fees and fixtures and fittings rentals.
But it did go as far as Greene King, and there are concerns that landlords in receipt of government grants to help them meet their living costs are being asked to use them towards remaining rent costs.
Among the other members of the ‘big six’ pub companies, Admiral Taverns cancelled rents for tied tenants for a six-week period, and those not in receipt of a government grant will continue to pay no rent in May and June, while those receiving the £10,000 government grant will pay a capped rent of £1,500 for each month. Those receiving the £25,000 grant will continue to pay rent.
Marston’s, which runs the Monkfield Arms in Cambourne, is deferring rents and adopting a case-by-case approach to its 340 tenanted and leased pubs. The company has said it is putting the case to the government that omitting pubs from grant relief if they have a rateable value of more than £51,000, or which are in turnover share agreements with the pub company, is unfair.
Likewise, Star Pubs & Bars said it is providing rent relief to all its leased and tenanted pubs on an individual basis and is deferring rent collection until pubs reopen, and will offer “flexible” repayment plans.
And Punch has said this is not a “one-size fits all” situation, but has deferred rents and other bills, while lobbying government for further support.
Many pub companies and brewers have cancelled rent, however, including Suffolk-based Adnams, London-based Fullers and Hertfordshire-based McMullen.
Pub companies and brewers that have cancelled rent:
- Admiral Taverns (for some)
- Gray & Sons
- Hall and Woodhouse
- JC Palmer
- Joseph Holt
- Shepherd Neame
- Timothy Taylors
- Wells and Co