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Thu 11th Jun 2020 - Update: Operators unimpressed by draft property code of conduct
Operators unimpressed by draft property code of conduct: Sector operators have given an unimpressed response to the draft version of the government’s code of practice for landlord and commercial tenant negotiations, which was published yesterday. In its scope and objectives, the code states: “The relationship between landlord and tenant is defined by law and it is not the intention of this code to undermine or alter the basis of the legal relationship or existing lease contracts, or override arrangements which have already been put in place (for example through side letters or deeds of variation). It remains the case that tenants remain liable for rent arrears, unless this is renegotiated by agreement with landlords. We recognise however the impact that covid-19 and the associated closures measures have had generally, and on the income of the hospitality, leisure and retail industries in particular. This means that landlords and tenants must work together collaboratively and many will want to find temporary, and where possible sustainable, agreements outside of the existing letter of their leases in order to create a shared recovery plan. The aim of this code is to facilitate those discussions by communicating best practice and presenting a unified approach for the industry.” The draft code then goes on to set out six key points: Basis – this is a voluntary code and does not change the underlying legal relationship or lease contracts between landlord and tenant. Transparency and Partnership – we have a mutual community interest in business continuity that reaches far beyond covid-19. We are economic partners, not opponents. Therefore, in all dealings with each other, in relation to this code and the covid-19 crisis, we will act reasonably, transparently and in good faith. A Unified Approach – we will help and support each other in all of our dealings with other stakeholders including governments, utility companies, banks and financial institutions to achieve outcomes reflecting this code’s objectives, and to help manage covid-19’s economic and social consequences. Government support – where businesses (whether landlord or tenant) have received government covid-19 related subsidies or reliefs, we recognise that this support has been provided to help businesses meet their commitments. This will include a spectrum of costs from supplies of goods and services as well as rent and other property costs such as insurance, utilities and service charges. Acting Reasonably and Responsibly – we will operate reasonably and responsibly, recognising that everyone is impacted by covid-19, in order to provide support where it is most needed. This means that tenants who are in a position to pay in full should do so, and tenants who are unable to pay in full should pay what they can. This will help landlords to support those tenants who are in greater need and to maintain development activity which will contribute to economic recovery. It also means if a landlord is able to, whilst having regard to their own financial commitments and fiduciary duties, they should provide support to a tenant who needs it. Where landlords and tenants, acting reasonably and responsibly, have been unable to reach a specific agreement but both feel that a negotiated outcome could still be achieved, a third party mediator could be employed by mutual agreement (if the cost of this is proportionate) to help facilitate negotiations. Rental Payment or Waiver Plans – we recognise every landlord and tenant relationship is different. As part of that, we respect the rights of landlords and tenants to settle on the rental payment plan that suits them best. However, in seeking a reasonable rental payment plan, both parties should act in good faith, reasonably and flexibly. Tenants seeking concessions should be prepared to provide justification for their request through a transparent approach to the properties in question. Landlords refusing concessions should be similarly transparent should they do so. In both cases this transparency should include financial information to the extent appropriate and relevant, which may differ from case to case. The signatories’ support of the will apply until 24 June 2021. One sector chief executive told Propel: “Just creating a framework to encourage people to talk doesn’t really solve the problem.” At the same time, Jonathan Downey, founder of Hospitality Union, which earlier this week, wrote a letter to the chancellor Rishi Sunak with a new proposal for a #NationalTimeOut rent deal, called the draft code “embarrassing, amateurish, pathetic”. He said: “It’s woeful and feeble and will do nothing to help those tenants that need it the most. Tenants need protection from the worst kind of land-grabbing, aggressive, threatening landlords none of whom will pay any attention to this. They won’t act reasonably or responsibly and in good faith. Some of these landowners are the worst kind of people, and we’ve seen plenty of evidence of that. They will ignore this toothless, voluntary waste of time. We have been forced to stop trading by government order, there is a rental bloodbath just over two weeks away and they come up with this. Useless.”

Chancellor suggests 2m rule should be cut to save jobs and help reopen pubs: Chancellor Rishi Sunak has told a meeting of the 1922 Committee, the parliamentary group of the Conservative Party in the UK House of Commons, that he believes the two-metre social distancing rule should be cut to save jobs and help schools reopen, warning that 3.5 million people could lose their jobs. According to Steven Swinford, deputy political editor at The Times, the chancellor told the committee that 24 countries had introduced the flexibility to cut the two-metre rule and suggested three-quarters of pubs will be able to reopen next month if the rule changes, only a quarter if not. He also suggested it could help reopen schools. At the same time, the chancellor was reported as saying that Britain was facing a “very different scenario” to previous recessions as people will not be short of cash when the lockdown is eased. He said that credit card debt is lower than at any time in living memory as people have not been economically active. The government is also facing calls from Tory backbenchers to drop the two-metre social distancing rule in England. MPs, including former cabinet ministers Sir Iain Duncan Smith and Damian Green, said the cut was essential for the economy. The government has said it is constantly reviewing its coronavirus lockdown guidance. Former Conservative Party leader Sir Duncan-Smith warned of dire economic consequences, with public transport running quieter than necessary and pubs, restaurants and cafes unable to stage a proper recovery or even open. He has urged ministers to move to a one-metre policy – in line with World Health Organization guidance already followed by countries including France, Denmark and Singapore. “The number one and single most important priority to unlock the economy is getting the distance down to one metre,” he told the Daily Mail. “The hospitality sector simply can’t make a living at two metres.”

Just Eat Takeaway sets out Grubhub acquisition rationale: Just Eat has given more details on the rationale behind its acquisition of US firm Grubhub – it is to acquire 100% of the shares of Grubhub in an all-stock transaction to create the world’s largest online food delivery company outside of China, measured by revenues. The company stated: “The transaction represents Just Eat’s entry into online food delivery in the United States and builds on the strategic rationale for its recent merger with Just Eat. A combined Just Eat and Grubhub will become the world’s largest online food delivery company outside of China , with strong brands connecting restaurant partners with their customers in 25 countries. The combined group will be built around four of the world’s largest profit pools in online food delivery: the US, the United Kingdom, the Netherlands and Germany, increasing the combined group’s ability to deploy capital and resources to strengthen its competitive positions in all its markets. The combined group has strong leadership positions in almost all countries in which it is present and will become a significant player in North America. Just Eat owns the leading Canadian business SkipTheDishes. The combined group is one of the few profitable players in the space and processed approximately 593 million orders in 2019 with more than 70 million combined active customers globally. Jitse Groen, chief executive and founder of Just Eat, said: “Matt and I are the two remaining food delivery veterans in the sector, having started our respective businesses at the turn of the century, albeit on two different continents. Both of us have a firm belief that only businesses with high-quality and profitable growth will sustain in our sector. I am excited that we can create the world’s largest food delivery business outside China. We look forward to welcoming Matt and his team to our company and working with them in the future.” Matt Maloney, chief executive and founder of Grubhub, said: “When Grubhub and Seamless were founded, the online takeout industry didn’t exist in the US. My vision was to transform the delivery and pick-up ordering experience. Like so many other entrepreneurs, we started modestly – restaurant by restaurant in our Chicago neighbourhood. Today, Grubhub is a leader across North America. I’ve known Jitse since 2007 and his story is much like mine. Combining the companies that started it all will mean that two trailblazing start-ups have become a clear global leader. We share a focus on a hybrid model that places extra value on volume at independent restaurants, driving profitable growth. Supported by Just Eat, we intend to accelerate our mission to be the fastest, best and most rewarding way to order food from your favourite local restaurants in North America and around the world. We could not be more excited.”

Robinsons increases rent support to more than £3m: North west brewer and retailer Robinsons has announced the next round of support for its tenants. The measures by the company, which operates about 240 tenanted and 20 managed pubs in North Wales and the north west of England, brings its planned rent support to more than £3m, which is an average of about £12,500 per pub, since the start of the coronavirus pandemic. William Robinson, managing director of the pubs division, said: “On 16 March we cancelled all pub rents, with them recommencing in steps from 4 July. The plan is to provide a discount of up to 90% for July; up to 60% for August; and 30% for September and October with those who did not receive a government grant paying less than those who did receive one. Over the July to October period this therefore amounts to a further discount of at least 60%, increasing to 63% for the pubs who did not receive a grant. Furthermore, we will delay the re-introduction of loan payments until August and payments into repair and decoration funds until January 2021. Of course, this support will be delayed for our 40 pubs in Wales as reopening plans are less clear there. Our business support managers have returned alongside colleagues from other support departments meaning we can support and advise our licensees with their operational planning and customer communications.” In the meantime, Robinsons has started brewing its cask and keg beer in preparation for pubs opening on 4 July, with plans in place to deliver in advance of that date. 

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