The Times They Are A Changin’

Landlords have profited from the boom in casual dining.

Low interest rates, deep pockets, and lots of vacant A1 units have encouraged growth.

Supply is reaching a tipping point, particularly in London; the market is saturated.

Interest rates, input costs, wages, competition, etc. have led operators to trim their opening pipelines and even dump units.

For the first time in years, landlords are struggling to fill space.

A Word on MRO and Tenanted Pubs:

Pubs who have applied for a pubs code review might find themselves bogged down in a lengthy, complex, and expensive process.

The process’ muted take-up might reflect its ability to bankrupt a pub business.

Or could it be tenants are realising that life is not quite so bad under the tied model as had previously been made out?

Either way, a year on since MRO rocked the tenanted pub market, the landlord is untroubled.

A More Residential Town Centre?

The High Street is another matter. Retail’s centre of gravity is shifting to online. A meaningful amount of physical shops are outdated.

While alternative leisure pursuits could fill up some units, this is akin to putting a band-aid on a bullet wound.

It’s a nice gesture, but you’ve still been shot in the arm.

House-building continues to lag targets; residential conversion of High Street retail units sounds like the most likely option.

This shift will take years to play out, however.

In the meantime, declining rents mark an opportunity for canny operators to selectively acquire sites in deals that can go some way to mitigating softer demand.