Shelley Sandzer, the leading specialist leisure property agency, has published a 10-point guide to help landlords and operators negotiate ‘win-win’ leases following the turmoil created by coronavirus across the hospitality sector.
The guide draws upon Shelley Sandzer’s experience, and feedback collected from landlords and operators during the lockdown and as the industry began to re-open.
Key points from Shelley Sandzer’s guide are:
- Utilise hot shells in key locations – hot shells, or fitted units ready for tenants to move into, reduce the capex required by operators. While there is an initial cost outlay for landlords, creating a hot shell makes a unit more desirable, and therefore more lettable
- Be smart with what you have – do not automatically take fitted units back to shell as many operators can re-use existing equipment, fixtures and fittings
- Turnover rents – adopting an outlet-style model, in which there is a lowest level of performance that gives the landlord the right to terminate, but which also means rents are directly related to success, will deliver benefits in the long-run
- Planning – the amendment to the Town & Country Town Planning Act, Use Classes 2020, is a very positive step by the government that creates a much more flexible ‘E’ use class that will help future proof units. Licensing may remain a challenge in certain locations, such as residential areas, but at least the planning regime is becoming more favourable
- Flexible tenancies – a fitted unit or hot shell lends itself to flexibile tenancies, such as three- to six-month pop-ups, with operators being changed on a regular basis to create an exciting, dynamic line-up that is more engaging for consumers
Commenting on the launch, Ted Schama, co-managing director of Shelley Sandzer, said: “Having lived through many recessions, we have always seen the hospitality sector being the last to fall and the first to recover. This pandemic is different though in not only the opposite being true, but for its fast-tracking of structural changes in the sector.
“To help landlords and operators address the challenges, we have consolidated our advice, experience and observations into the Shelley Sandzer post-Covid-19 leasing guide. While it is crucial operators pivot and adapt to the post-pandemic world, the same also applies to landlords. All the points may not be relevant to everyone, and none are absolutes, but we hope the guide will serve as a helping hand for the industry as it rebuilds.”
The publication of the guidelines follows the advice developed by Shelley Sandzer as part of a joint initiative with Deliveroo and Goodwin in a project in May this year.