Friday, January 16, 2009

Punch Taverns is thought to have agreed to reduce a licensee’s rent and offered discounts of £12,505 a year after proposing rent increases of up to 51%.

Mark Pester sought a court hearing after Punch proposed increasing his rent from £41,000 to £52,000 at his lease renewal.

Pester’s legal team argued that £25,000 would be more realistic, especially as the pub — Sir Robert Peel in Norbiton, Surrey — had no discounts.

Punch was to go to court on 8 January to propose £61,500 after giving examples of higher rents at other pubs it said were comparable.

Pester’s rent valuation advisor David Morgan, managing director of Cookseys DMP, said this did not take into account the fact that these sites have higher turnover than the Sir Robert Peel.

Punch later reduced its proposed level to £37,500, but with no discounts, which was rejected by Pester.

An 11th-hour out-of-court settlement was reached. The MA understands that Punch agreed to reduce the rent to £37,500 and offer substantial discou

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Author Name Opinion Reply
Phil Jones 16/01/2009 09:05:52

1 Star Rating

RE: Punch licensee’s rent victory

I wouldn't call this a compromise Punch, I'd call it a defeat. The Licensee and their legal team were only fighting for a fair rent. They fought as long as they needed to and Punch had to admit they were not being fair.

Good luck to the Sir Robert Peel and now they can start to make money for themselves as well as Punch.

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J Mark Dodds 16/01/2009 09:07:21

5 Star Rating

RE: Punch licensee’s rent victory

Phil you are right.

Pubcos always want and get it - and generally get it - on the swings and the roundabouts. RICS, arbitrators, independent experts almost always go with the pubcos because that is where the bread is buttered in this industry. All the work comes through pubcos increasing rents and creating upwards tension in the market. Everyone has to agree with the inexorable climb up the greasy pubco pole one way or another. There is no doubt that most rent applications are based on hot air and greed. What the pubcos thinks is can get away with. All the stuff about FMT and the rest is pure porky pies cooked up to fir whatever rent they want. All comparables used in pubco rent reviews are the most excessive increases achieved in a region rather than like for like in a locality.

When a pubco loses - first it cannot believe that it's not getting its own way. The pubco EXPECTS all 'independent' observers to fall in line with their own expectations - it's been that way for so long how could it possibly be different this time?' And when a failure is staring them in the face, they rely on the lessee folding at the last hurdle - in fear of massive legal and professional costs being incurred in an attempt do no more than responsibly and adequately defend their own business position - and when the lessee has the balls to go to the wire - court and beyond - and the pubco finally realises they might actually LOSE (thunder! lightning! Brimstone! Damnation! Shareholder Value dashed! Precedent might be set! horror! Shock!) they leave it to the eleventy eleventh minute and ninety ninth second to change their tune, capitulate, and come up with a deal that should have been put on the table a year or so before all the posturing and escalating costs of action were incurred by the pubcos rapacious irrational greed.

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J Mark Dodds 16/01/2009 09:23:22

5 Star Rating

RE: Punch licensee’s rent victory

Lessee wins, goes home, a little of it gets into the press and nothing else changes. It didn't get set and finalised in court; it's not a precedent and this rent review was just 'the one that got away'.

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