After three months of forced closure, to say that a confirmed industry reopening date is a relief would be a severe understatement.
But according to Boxpark founder Roger Wade, without a resolution on rent, for many operators this relief will be painfully short-lived.
“There will be no recovery until we resolve the rent issue,” he tells MCA. “Operators will struggle to make any money this year, and if something doesn’t happen with rent people are going to start turning to CVAs and administrations.”
“That will mean more operators out of business, more people unemployed, and more landlords going into administration.”
In its unique position as landlord, operator and tenant, Boxpark straddles both sides of what has turned out to be an increasingly fraught rental dispute.
Home to between 20 and 30 F&B traders in each of its three sites – Shoreditch, Wembley and Croydon – the business set the bar for other landlords back in March by cancelling all rent and service charge for tenants across its estate.
But Wade says that inevitably, with the return of operations, so will come the return of rental liability.
“That’s why I’m trying to encourage the Government to offer some support,” he explains. “We’ve already seen papers from some of our operators asking for additional help beyond the help we’ve already given.”
“But there’s only so much a landlord can give because we still have our own business to run.”
At present, the government’s support on this ongoing issue – extending the lease forfeiture moratorium and debt enforcement moratorium until September, providing a voluntary ‘code of conduct’ for rent negotiations – has been received by many in the industry as little more than a deferment strategy.
And branding the code of practice “ridiculous” and “pointless,” this is a view shared wholeheartedly by Wade.
“The code of practice is not worth paper it’s written on,” he says. “It tells us we need to have some kind of gentleman’s agreement to work together. But what are the repercussions if we don’t work together? There are none.”
“All the code is really there for is to encourage landlords and operators to have a discussion, but we need to have a framework that applies to everyone.”
Currently involved in curating a proposal with UK Hospitality CEO Kate Nicholls and Revo CEO Vivienne King, Wade sees the only viable rental solution as being that of a three-way shared pain.
In practice, the proposal – dubbed a ‘space furlough’ – would form a framework to instruct landlords to grant tenants one quarter of free rent and service charge backdated to the beginning of Q2, which would be followed by a direct fiscal government grant covering a further quarter of rent.
“That would effectively reduce the rent bill by 50% for the operator,” Wade explains. “Which would at least give them a fighting chance to survive and break even.”
“It can’t be left to thousands of individual deals to resolve this rental crisis, so it’s only with a proper framework that we’ll be able to get a solution across the entire industry.
“Without a solution on this there will be no bounce back.”
Hopeful that the Government will eventually come to its senses on rent, the ongoing proposal has not distracted Wade from Boxpark’s plans for an “all singing all dancing reopening on 4 July.”
Despite reservations about the lack of detail and lack of time afforded to businesses for reopening, he says that with new features including mandatory hand sanitiser, table service, distancing signage and Perspex screens, the business has “a fighting chance” of operating viably in the ‘new normal.’
“The biggest thing we’ve worked on is a mobile pre-ordering app, so consumers can order food and drink before they even arrive,” he says. “As a result of that we’ll know everyone who will be at the sites.”
“Restricted to table service and pre-registration you have to ask yourself how, in a week and a half, are operators going to be able to figure that out?”
“But we’ve been preparing for 4 July for the past two to four weeks. We’ve been dying for this moment. July 4 is Independence Day. They’ve finally freed our sites!”
Boxpark founder Roger Wade: ‘The rent code of practice isn’t worth the paper it’s written on’
After three months of forced closure, to say that a confirmed industry reopening date is a relief would be a severe understatement. But according to Boxpark founder Roger Wade, without a resolution on rent, for many operators this relief will be painfully short-lived. Of the opinion that there will be no recovery without an industry-wide rental framework, Wade discusses his three-way shared pain solution - a ‘space furlough’ intended to cut the operator’s rent bill by half, and give many in the industry a fighting chance at survival.