Boxpark CEO Roger Wade: Rent is the ‘dinosaur in the room’

Without a workable solution to tackle outstanding rent liabilities, all other support packages and recovery measures will be a “total and utter waste of time,” Boxpark CEO Roger Wade has said.

Speaking at MCA’s virtual event The Conversation, Wade voiced his frustration at the lack of any movement from government on the rent issue, and urged the industry to join urgent calls for financial support.

“I think we’re all burying our heads in the sand here, but the dinosaur in the room is rent,” he said. “We need to address this issue and we need to address it soon.

“We’ve been talking about it since day one and here we are, six months down the line, and it’s still not on the table.”

With the rent moratorium due to come to an end by the end of September, should government choose not to grant an extension many operators who have been unable to come to any agreement with landlords could be facing up to nine months outstanding rental debt.

If this were to be the case, Wade said, “you’re not going to have many businesses that survive.”

“Many businesses will be forced to go into administration or enter CVAs. So, all this suggested bounce back we’re going to have is not going to happen.

“We’re going to have millions of people unemployed, and as a result of that the GDP of the UK will come down massively, our ability to service up debt will come down, and it will lead to a long-term recession. Possibly a depression.”

While there has been some suggestion from ministers that a moratorium extension is likely, Wade dismissed this as a solution in and of itself, viewing it as nothing more than a delaying strategy that would force operators to turn to administration processes or CVAs further down the line.

Instead, he supports the Property Bounceback scheme, as proposed last month by UK Hospitality in partnership with a group of landlord and operator trade bodies.

The scheme - which would see government issue grants of up to 50% of rent and service charges between March and September, conditional on an agreement by the landlord and tenant to account for the remaining 50% - “is an absolute must,” he said, and would encapsulate the shared pain approach that a crisis of this kind calls for.

“Landlords didn’t create this problem, tenants didn’t create this problem, and the government didn’t create this problem.

“What we need to do is actually address the problem head on. The Property Bounceback scheme is the minimum that the industry needs, and that’s what we need to start to look at.

“We need to make sure that we get some rent support for operators, and then sit down sensibly, and find out the long-term solution. We need to stop burying our heads in the sand and sort it out or we won’t survive.”

Sharing Wade’s view that a moratorium extension is “on its own not an answer,” UK Hospitality CEO Kate Nicholls added that finding a solution to the rent stalemate is “the one thing that will be make or break in terms of a successful recovery.”

While she has had no concrete feedback from government about what their next steps in dealing with the issue could be, Nicholls reassured attendees that ministers “at the top levels” were aware of the pressing need for a solution.

“I know that government is working on doing something, but I can’t say whether it’s the right thing, whether it’s what we need, or whether it’s what they think they’re going to deliver,” she said.

“I don’t feel as though we’re on an imminent breakthrough in terms of successful grant contributions, but government is still taking that away and reviewing it.

“We’ve been working on it since day one, and it’s frustrating that we haven’t been able to deliver a solution that works for the industry.”