Star Pubs & Bars & Belhaven have stepped in with rent concessions to help their Scottish pubs through the next 16 days and longer.
Star Pubs & Bars is to extend rent concessions for its leased & tenanted pubs beyond October and into November at a cost of £2.8m and will then review them on a monthly basis for the foreseeable future the company has said.
Belhaven Pub Partners also announced all its 120 tied tenants in Scotland will receive a 90% rent discount for the 16-day closure period announced by the First Minister, with further rent support also confirmed up until Christmas.
Star Pubs and Bars pubs will be given a 30%, 35% or 50% reduction depending on their individual circumstances and the Government support they have been able to access. These calculations are available on the Star Pubs & Bars website and the move brings Star’s total investment in rent reductions to £27.8m since the end of March.
The company likewise confirmed it would continue to review rents in areas where there are local lockdowns that prohibit pubs from opening altogether. To date Star has cancelled rent for its pubs in Aberdeen, Bolton and Leicester whilst they have been forced to close during local lockdowns. The company are also cancelling rents entirely for over 100 of their pubs forced to close in Scotland’s 16 day central belt lockdown from tomorrow.
Lawson Mountstevens, Star Pubs & Bars Managing Director said, “We’re committed to helping our licensees through these uncertain times and reducing rent is central to the support we’re providing.
“The introduction of the 10pm curfew and additional restrictions in many areas are impacting consumer confidence and are a major blow to licensees who have worked so hard to get their pubs safely back up and running.
“Alongside the whole industry, we’re urging the Government to put further financial assistance in place to offset these measures and to clarify their plans as a matter of urgency in order to bring some much-needed certainty to the hospitality sector and prevent further business closures.”
Belhaven’s concessions brings its estimated financial support for its tied tenants in Scotland to around £3m since the Covid-19 pandemic closed the country’s pubs.
Although pubs outside the Central Belt can remain open from 6am-6pm during this period, only being allowed to serve alcohol outdoors and remain open past 6pm outdoors effectively shuts the pubs in all but name and so the decision was taken to apply the 90% rent discount across the board.
Upon reopening, all tied tenants will receive at least a 40% rent discount up until Christmas. Once this next wave of support is coming to an end there will be a review of whether additional support is required into 2021.
When pubs are open and trading, they will receive the following rent concessions backdated to 27 September and tiered as follows:
- From 27 September 2020 to 24 October 2020 tied partners will receive a rent credit of 50%
- From 25 October 2020 to 21 November 2020 tied partners will receive a rent credit of 45%
- From 22 November 2020 to 26 December 2020 tied partners will receive a rent credit of 40%
Also, an existing discount on barrels purchased from Belhaven will now run until 27 March 2021, with tied tenants receiving a trade credit of £35 per barrel.
Belhaven Pub Partners managing director Wayne Shurvinton said: “We are doing all we can to support our leased and tenanted partners at this extremely worrying time for them. Even pubs that can remain open for this 16-day period are closed in all but name as they cannot serve alcohol indoors and can only remain open outdoors after 6pm.
“Our tenants are understandably very concerned about the impact this measure could have on business and are waiting to see the details of what the promised £40m of financial support from the government involves. Even when pubs can reopen, their trade remains greatly impacted by the 10pm curfew and the worry is that this will only worsen throughout the winter.
“This additional rent support for our tenants shows our commitment to supporting UK pubs as we all try to weather this storm together. We understand that firm and decisive action is needed to tackle the threat of Covid-19, however to impose additional restrictions on an entire industry without adequate financial support from the government puts hundreds of businesses in a precarious position and leaves thousands of livelihoods at risk.”
Belhaven tied tenants have received the following support to date:
- All pub rents were immediately deferred for the entirety of the period pubs were closed.
- From 20 March to 10 June (first 12 weeks of closure) a Partner Support Fund was launched. One-to-one discussions took place with all tied pubs to understand their immediate financial situation so rent concessions could be targeted at pubs that had not been eligible for any government grants. Pubs with a rateable value under £51,000 were eligible for a government grant up to £25,000 to allow businesses to continue paying fixed costs, such as rent.
- From 11 June all tied pub tenants received a 90% rent concession that ran until four weeks after a pub was legally able to reopen, at which time a 50% rent concession continued for another four weeks.
- On 21 August all tied tenants were notified they would receive a 40% rent concession for a further four weeks after the previous round of support came to an end, then a 30% rent concession would continue for the four weeks after that, taking support through until October. This has been superseded by the new increased level of support announced this week.
- All the unopened kegs and casks that were out of date and unsaleable in pubs while they were closed were replaced for free with fresh stock on reopening in July, at a total cost of approximately £1.3m + VAT.
- Every single Belhaven tied tenant was signed up to be a member of the BII (British Institute of Innkeeping), an independent body that provides expert advice on everything from legal and licensing issues to tax queries. Membership usually costs £155 per pub per year. This covers the next two years and will be reviewed on an annual basis.
- All partners received £250 of PPE support for free, as well as £120 of Covid-19 signage, plus the offer of free training courses and business support planning.
Pictured: The Drum in Glasgow.