Leading analyst Mark Brumby at Langton Capital says that change is the only constant but asks do operators signing 25-year, upward only leases have this front of mind?


  • · Evolution is unstoppable, it’s going on around us.
  • · And variables are called variables because they are, well, variable.
  • · Hence change is the only constant – be it footfall, customer base, tastes…
  • · Do operators signing 25yr, upward only leases have this front of mind?

Problem spotting v problem solving:

  • · Evolution problem or opportunity?
  • · Either way 1) what’s going on & 2) where to from here?
  • · Recently Domino’s has ballooned, Just Eat trades on 70x EPS etc.
  • · In the last week: Burger King says it will deliver, Pizza Hut has been doing this for years; Starbucks will serve booze, McDonald’s has obliged in Europe since forever; and High rents have been criticised, both in London & in some provincial areas

So what now?

  • · High rents could/should spur growth of:

a) Street-food – but few investible opportunities

b) Delivery operators – ditto

c) True ‘destination’ sites - ditto

d) Casual diners operating profitably from secondary/tertiary sites – Franco Manca, MEATliquor, PatVal etc.

  • · On the downside, high occupancy costs could be a brutal game of pass-the-parcel.
  • · There is a land grab currently underway but lease signatories (PE houses etc.) are not just committing themselves to a lifetime liability, they’re committing the ultimate buyer…