Morgan & Clarke received instruction from the Tenant of a wet-led public house in North West London to assist with a tied rent review. The property, located in a central high street position, faced intense competition in the form of managed houses. Naturally, our client was unable to compete with the retail selling price structure adopted by the managed houses on both food and drink.
The Tenant had decided to request MRO (free of tie) option after receiving the tied rent assessment proposal. Following an inspection of the property, an in-depth rental assessment was undertaken together with detailed advice and recommendations to the client on how to proceed.
Morgan & Clarke were subsequently instructed to enter negotiations with Stonegate. Our transparent advice led to the ultimate settlement of the rent review at an acceptable level, on a tied basis, without the need to resort to third party thus saving time and further professional fees.
1. Stonegate Original Tied Rent Assessment Proposal - £47,500
2. Morgan & Clarke Tied Rent (Tenant Advice) - £32,000
3. Negotiated Settlement - £32,000 with a cap at 4% and collar at 2% on RPI
4. Passing Tied Rent - £42,500
5. Five-Year Savings - £47,500 *not accounting for RPI rent increases.
Morgan & Clarke were able to secure an approximate £10,000 rent reduction (-24.7%) on the passing rent, set against Stonegate’s original tied rent assessment proposal the outcome resulted in a rent 32.63% lower.
Morgan & Clarke used its market knowledge and expertise to secure competitive terms for our client. In addition to the rent settlement above, we agreed with Stonegate to a ‘cap and collar’ of the annual RPI linked reviews, which were open-ended under the lease, which was essential considering the inflationary pressures present at that moment in time.