Branded chains are gobbling up London’s best restaurant sites: London’s best restaurant sites are being increasingly occupied by branded chains, squeezing out smaller operators, The Daily Telegraph has reported. Quality medium-sized locations in the West End are receiving up to 50 bids from rival operators, according to Peter Thomas, director of Central London retail at Savills, with between 15 and 20 bidders for sites of around 2,000 square feet. The problem has got worse as more international chains arrive in the capital. According to commercial property agent Devono, demand from foreign eateries has doubled in the past year, and many are waiting in the wings for up to a year to secure sites in prime locations. UK restaurant start-ups and growing brands seeking premises are suffering in this seller’s market. Savills’ Thomas has seen rents double in the past three years, and demand “rapidly outstrip supply”, but there is another reason that growing independent restaurants are struggling to find sites. “There are places in London that ‘go dark’ at night-time now because no one lives there,” restaurant operator Barry Hilton told The Telegraph. “Knightsbridge and some other parts of town are no longer viable when you need daytime as well as evening trade.”
Company News:
Travelodge seeks 205 new sites around the UK: The budget hotel chain Travelodge is to embark on a £1.3bn expansion programme that will add 205 new hotel sites, Property Week has reported. Property agents representing Travelodge are contacting developers and landowners offering them 25-year leases, backed by the group’s US investors. The landowner would then build the hotel to Travelodge’s specifications and the hotel group would fund the fit-out. Alan Hill, Travelodge's consultant development manager for the South London area, said: “One of the attractions is that Travelodge will sign up to 25-year leases, with no break and indexed-linked rent reviews.” Travelodge has also written to 140 local authorities to offer the same deal being offered to developers and landowners. Since sending the letter in December, four councils have expressed an interest in developing hotels and leasing them to the group. The largest concentration of new openings will be in London and the South East, but the expansion programme will take in other towns and cities, as well as some motorway service station locations. A spokeswoman confirmed the average cost of the current new-build programme was around £6.6m a hotel, meaning if Travelodge were able to secure 205 sites, the investment programme would total around £1.3bn for fit-out costs and leases. She said the group expected to launch the hotels at a rate of 25 a year.
Urban Pubs and Bars open fourth pub with wood-burning pizza oven: Urban Pubs and Bars, led by the former Realpubs owner Nick Pring and Malcolm Heap, has opened it fourth pub, the Rose Pub and Kitchen, at the site of the former Hobgoblin in New Cross, South East London. It offers pizza from a wood-burning oven. The company also runs the Whippet Inn in Kensal Rise and the Old Ship Inn in Hackney, both North London. Pring said: “I’m not going to call it a gastro pub, because I don’t want people to think they can only eat when they come here. The thing people need to understand is, it’s a pub first and foremost, even though we will be doing some good food here.”
New craft beer and smokehouse concept opens in Norwich: A new craft beer and smokehouse concept, Virtuoso Craft Brewpub and Smokehouse, has opened in Norwich, at the site of the former Kett’s Tavern on Kett's Hill. It will supply more than 100 bottled beers from around the world, as well as a wide range of wines. Co-owner Ami Hodgson, said: “We have 28 different beer lines as well as local and national cask ales, ciders and lagers. We have always been fans of different specialist beers, which is what craft pubs are all about. There are some great draught beers, including beer from Norwich’s Redwell Brewery and we are in the process of installing our own nano-brewery on site, which will allow people to eat and drink products that are made on the premises. Our on-site smokers produce warm smoke rather than hot smoke, which leaves our meat more moist and tender than the dry style preferred in the south of the US.”
Starbucks in Canada to start serving alcohol: Starbucks Canada has revealed plans to expand its offerings to include night-time wine, beer, and tapas service in select locations. In the United States, Starbucks has already launched an “evenings” programme, with thousands of sites selling wine, beer, and savoury nibbles after 4pm. In an interview with the Toronto Star, the president of Starbucks Canada, Rossann Williams, confirmed that a similar offer will be rolled out in locations in Toronto and other big cities in Canada by the end of the year. The alcohol menu will be limited to beer and wine, and the tapas will include selections such as flatbreads, olives, nuts, and cheese.
Weston Castle takes seventh Star Pubs & Bars lease: The North West of England multiple operator Weston Castle has taken the lease on the Queens Arms in Aintree, Liverpool with Star Pubs & Bars and is investing in a joint £250,000 refurbishment of the site, which is due to reopen in mid-March. Weston Castle took its first leased pub with Star Pubs & Bars in March 2014 and, with the signing of the Queens Arms, now has seven sites with the company and an estate of 35 pubs. Chris Tulloch, Weston Castle's managing director, said: “We took our first sites with Star Pubs & Bars a year ago as a trial of them and of shorter-term non-FRI leases, which we had not used before. We’ve found it a great partnership and now have seven pubs with them. Their range of brands – Fosters, John Smiths and Strongbow – is perfect for the community sector of the market which we serve. As a multiple operator, SmartDispense has proved a huge bonus, making training easier and ensuring consistently good quality beer, which is key for us as our pubs are wet-led.” Chris Jowsey, trading director at Star Pubs & Bars, said: “Weston Castle’s understanding of community pubs is second to none. With two other pubs having closed locally to the Queens Arms there is a gap in the market for a quality local. We are delighted to be investing with Weston Castle; the site has real potential which we are confident their expertise and operating model and our support and beer brands can unlock.”
Restaurant Group swaps broker: The Restaurant Group has change brokers. The company, which operates Frankie & Benny’s, Chiquito, Garfunkels and other restaurant chains, has replaced its long-standing broker Panmure Gordon with Numis Securities. The company’ second broker, JP Morgan Cazenove, remains in place.
Hallsworth to open new Kurobuta site and launch new Joe’s Oriental Diner concept on the same day: Chef Scott Hallsworth, who launched the sushi restaurant concept Wabi, is to re-open his Kurobuta restaurant in larger premises at 312 King’s Road in Chelsea, West London and launch Joe’s Oriental Diner on the former King’s Road site of Kurobuta on the same day, Thursday 19 February. His new concept is meant to evoke the “dive bar subculture of the Orient” with a Pan Asian food offer, "staying honest to the bare bone, gritty roots of recipes consumed in the ports of Asia". Dishes will include fire cracker chicken, crunchy sweet and sour fish and slow-cooked duck red curry.
Extra MSA issues £220m refinance bond: The motorway services group Extra MSA, which operates 18 motorway service areas and has taken a lead in a more progressive approach to foodservice at areas such as Beaconsfield, has re-financed with a £220m bond. The private bond issue supports one of its portfolios containing nine motorway service areas, including the M40 Beaconsfield and the M25 Cobham. The company has introduced a number of well-known brands to the UK motorway network, including Nando’s, Patisserie Valerie and JD Wetherspoon. It has also introduced kiosk-style tenants such as Carvery Express and Chopstix. Andrew Long, chief executive of Extra, said: “This is a ten-year bond issue, with a fixed low coupon rate of less than 3.7% and no amortisation. The overall terms endorse the quality of Extra’s MSA assets and long term resilience of its business model.”
Geof Collyer – we expect Enterprise to adopt more overtly commercial property management approach: Deutsche Bank's leisure analyst Geof Collyer has forecast that the introduction of a market rent only option, ending the beer tie, will trigger a much more overtly commercial property management approach at Enterprise Inns. He said: "In our recent sector note (‘The elephant has left the room', November 2014), we suggested that the [market rent only option] could potentially cost ETI around £50m, but that the group could more than offset this negative impact through a combination of (i) passing on half of the lost profit in higher rent (implying around a 75% increase for the average pub electing to break the beer tie, which it would achieved by opting for the MRO); (ii) reducing discretionary licensee support; (iii) ending the annual increments of extra ‘baked-in’ beer discount; (iv) reducing head office overhead; (v) taking back some pubs and converting into an ETI directly managed estate. After the H1 results and the UK election (both in May), we expect ETI to host a capital markets day at which we envisage the group laying out its detailed response to the MRO impact. We see this as driving a much more dynamic, overtly commercial property management approach to delivering shareholder value, which could also include carving out a REIT, a managed estate and a more directly controllable tenanted estate. This should re-engage investors with the equity and significantly narrow the current discount to NAV (65%). Our 205p price target is based on a 30% discount, but is also 10x FY’15E P/E – the average for Enterprise Inns since IPO in November 1995."
Real estate investment firm sells Kent pub to tenants: The real estate investment arm of Albanwise has sold the award-winning Bull Hotel in Wrotham, Kent via the property agent Davis Coffer Lyons to its existing tenants for £775,000. The Bull was originally being marketed as an investment opportunity subject to the occupational lease. However, the tenants secured the freehold for themselves. This is the second site in a three-pub portfolio that Davis Coffer Lyons has sold, having completed the sale of the Bull in Stanford Dingley, near Newbury in Berkshire. The Crown at Broughton, near Huntingdon, Cambridgeshire is currently available for £425,000, representing a net initial yield of 6.68%. The Bull Hotel sold off a net initial yield of 7.65%. The new owners originally became tenants of the Bull Hotel in 2008 and have carried out extensive refurbishment. Chris Bickle, associate director at Davis Coffer Lyons, said: “Against a background of improving investment conditions, the tenants demonstrated a fierce determination to secure the freehold. There was substantial interest from investors. However, with a great deal of support from the landlord, Albanwise, they were successful, ensuring a great outcome for all involved.”
Former Brighton nightclub to go to auction: A former nightclub In Brighton is to go under the hammer next week. The Jive Monkey nightclub in Steine Street, Brighton, is expected to reach up to £350,000 when it comes up for auction at the Hilton Brighton Metropole next Tuesday. Potential bidders are being told the location could be a “sought after late-night music” venue or could be converted into two or more flats.
Carluccio's set for mid-May opening in Cheltenham: Carluccio’s is to open in Cheltenham in mid-May, replacing Mothercare in the Regent Arcade Shopping Centre. The arcade's manager, John Forward, said the unit is still being stripped out ready for hand-over to Carluccio’s in March. The restaurant will then begin work on the shop fit. “It’s going to add a great deal of value to the town,” he said. “The independents gives us individuality and there’s always a place for them but people do follow national brands. People are likely to travel 10 or 15 miles to come to Carluccio’s.” The head chef role comes with a £39,000 salary and training in Piedmont in Italy.
Prezzo signs for Corby site: Prezzo has signed for a new site in the under-construction Savoy cinema complex in Corby, Northamptonshire. The development, opposite the Corby Cube, includes three restaurant units. Prezzo has now become the second chain to reveal it is moving into the complex. Nando’s announced it was moving into another one of the units in December. The £6m development, on the former Tresham College site, also includes a six-screen cinema, which will be operated by the Nottingham-based independent cinema group Savoy. Mulberry Property Developments, the company behind the complex, said the cinema and restaurants were due to open in the spring.
Stonegate wins at HR Distinction Awards for second year running: Stonegate Pub Company, which operates 606 pubs employing over 12,000 people, has picked up the Distinction in People Development award at the HR Distinction Awards This is the second year that Stonegate Pub Company has won at the HR Distinction Awards, having been presented with the Award for Innovative Use of Technology within HR last year as well as being runner-up in the People Development award. Next month Stonegate will also find out if has been awarded for a second time the title of "Best Employer 50-plus sites" at the Publican Awards, the licensed retail sector’s industry awards. Tim Painter, human resources director at the Stonegate Pub Company said: “It is an honour to receive a second consecutive award at the HR Distinction Awards in recognition for our development in people. We are proud of ‘Albert’s Theory of Progression’, our career pathway that each and every employee is a member of. We are in the hospitality business, so for us, ensuring our customers have a fantastic experience in our pubs and bars is our primary aim. We couldn’t do that without great people, so investing in our people’s development, giving them a clear, achievable career structure, is of utmost importance. This award is not just for our HR team but for every single employee who works so hard to make our business the success it is.”
New Zealand Craft Collective appoints Instil as UK agent: The New Zealand Craft Beer Collective, a group of some of the most awarded and pioneering brewers in New Zealand, has appointed the Instil Drinks Co as its UK agent. The collective was formed in mid-2014 with the aim of encouraging collaboration between brewers to help spread the New Zealand craft beer story in the UK. The collective consists of Tuatara on the Kapiti Coast, Marlborough-based Renaissance, 8 Wired from Blenheim, Three Boys from Christchurch and Yeastie Boys from Wellington. Instil, part of the recently formed Bibendum PLB Group, will act as country manager and agent for all of the brands within the collective.
Wahaca to showcase high-end Mexican food at flagship Covent Garden site: Mexican chain Wahaca is to showcase high-end Mexican dishes at its flagship site in Covent Garden, Central London from this month, with recipes from different regions served by top chefs. . The Oaxaca region, pronounced “Wahaca”, will be showcased, with dishes including grasshopper tlayuda (a crispy tortilla), and short ribs with mole sauce. In April, Enrique Olvera, the chef at the Mexico City restaurant Pujol, ranked 20th in the world, will launch an eight-week season highlighting the food of the country’s capital. Thomasina Miers, Wahaca's founder, said: “We’ve got another famous chef coming in June when, for two months, we’ll have dishes from the Yucatan. Covent Garden is going to become this hub of regional dishes through this year. Through the regions the food changes so much with the ingredients. We feel like we were pioneers of real Mexican. It’s gratifying now that Rene Redzepi [co-owner of the Danish two Michelin star restaurant Noma] is trying to open a tacoria in Copenhagen. Ferran Adria’s brother Albert has opened an award-winning Mexican in Barcelona. Mexico was the best-kept culinary secret, it’s got this enormous range of food, an incredible cuisine, and no one outside the US knew about it.”
Norfolk brewery plunged into second copyright battle: The Redwell Brewery, based in Trowse, Norfolk, is being sued for up to £100,000 by Camden Town Brewery of North London in a dispute over the name Hells lager. The Norfolk firm is accused of trying to trade on the success of Camden Hells, made since 2010, and has been asked to stop making its own Hells Craft Lager. Redwell has already spent £20,000 mounting its defence, with an estimated £30,000 more needed if a compromise is not reached. The brewery has now launched an online crowdfunding appeal to fund its legal fight, with options ranging from £6 for Redwell playing cards to £700 to name a special beer for a month and get a case each month for a year. The wrangle began a year after Redwell locked horns with the Austrian drinks firm Red Bull, which told the brewery to change its name, saying Redwell and Red Bull were “confusingly similar”. Camden fired a shot across the bows last September, sending a cease and desist letter, but Redwell claimed it heard nothing more until 16 December, a day after Camden lodged a claim at the High Court. Patrick Fisher, co-owner of Redwell Brewery, said Hells was seen by Germans as a generic description for light lager, as is the term Helles and Hell along with others.
Banwell House Pub Company launches Orderella: Orderella, the cashless app that lets users order and pay for their food and drink with their phone, has launched in the Banwell House Pub Company estate of four pubs. Toby Brett, managing director of Banwell House Pub Company, said: “We’re pleased to be working with Orderella, having installed it at all four of our sites. I have seen it in action in a number of places, and what sold it for me was placing an order while walking to the pub. I also like the idea of placing the order while sat in a pub garden to be brought to the table. I have seen another company’s research, which shows bar staff spend 30% of their time at a till rather than serving drinks, this will be a great help.”
Social conscience cafe chain reports success and new contract for outside catering arm: Social Bite, the Edinburgh-based sandwich shop chain run by social entrepreneur Josh Littlejohn, has reported success with its new corporate catering division. The company, which gives jobs to the homeless and donates all of its profits to charity, said the offshoot earned nearly £200,000 in revenue in its first six months of operation. Littlejohn said the move into corporate catering in July was a logical step for his business, which he set up with partner Alice Thompson two and a half years ago. The division is now seen as the key profit driver of the company, with the cafes serving as a shop window to build brand awareness and opportunities to employ people. Littlejohn said: "We knew that there are lots of big companies that are increasingly engaged with social responsibility, behaving ethically and all this kind of thing. So we thought this would be an easy win for them.” The firm has just secured a contract to provide catering to 800 construction staff at Brookfield Multiplex, which is building a hospital for sick children in Edinburgh. The food provided by Social Bite Catering, largely breakfast and sandwich platters, is created at the company's central production in Livingston, where 20 of its 45 staff are employed.
Domino’s largest franchisee becomes even bigger: RPM Pizza has agreed to buy 45 Domino’s Pizza locations in the US state of Indiana, making the chain’s largest franchisee even bigger. The acquisition of the units, mostly in Indianapolis and for an undisclosed sum, from previous owner Bob Taylor, gives RPM 185 locations. The deal was the largest transfer of franchisee-owned units in Domino’s company history. RPM’s chief executive, Glenn Mueller, said: “It’s a great time for Domino’s Pizza. It’s on fire right now.” Domino’s saw its like-for-like sales rise by nearly 8% in its third quarter in the United States.
Rare Berkshire freehold comes to market for £1.4m: A rare freehold in the village of Pinkneys Green, near Maidenhead, Berkshire has come on the market for £1.4m through the property agent Christie + Co. The 16th century property, in one acre of land, has a bar with 40 covers and a contemporary 80-cover restaurant. Tim Widdows of Christie + Co said: “The business only currently trades for five days a week, meaning there is significant scope for further improvement in sales.”
Lead Station owner to expand into Manchester: The owner of the Lead Station in Chorlton is to expand into the Northern Quarter in Manchester with a new restaurant and bar. Tariff and Dale, named after its location in a Victorian fabric warehouse on the corner of Tariff Street and Dale Street, is due to open in late March or early April. It will feature an "urban kitchen" headed by a local chef who has earned his stripes in Michelin-starred restaurants in London, and as a bar serving beers from UK microbreweries, cocktails and a selection of wines by the glass. The Lead Station has been going for 20 years after opening in a former police station on Beech Road, Chorlton in 1995. The bar and restaurant is owned by Nick de Sousa, and provides "honest homemade cooking", which includes sandwiches and salads, burgers, steaks and twists on classic European dishes.
Former Antic tenanted pub owned by Enterprise re-opens: A former Antic London pub in Tooting, South London, the Wheatsheaf, which faced 18 months of uncertainty, has opened its doors under new management. Antic London announced it would end its lease at the end of January. The potential closure gathered huge community concern and a campaign called Save the Wheatsheaf was started with the backing of Tooting MP Sadiq Khan. More than 8,000 signatures on the campaign's website persuaded the pub’s owner, Enterprise Inns, to keep the building a pub and planning protection was put in place. Just a day after the pub's doors were shut, it was announced a new tenant had been secured to take over and it resumed normal service on 3 February.
Downing reveals progress at £6m Autumn Pubs investment: The investment fund Downing has revealed progress at its Autumn Pubs vehicle, which owns ten freehold pubs and is managed by the East Midlands-based multiple Pub People and has seen £6m invested under an EIS scheme. Downing reported: “The Great Northern in Langley Mill, Derbyshire was purchased in May 2012 for £227,000. The pub was refurbished following acquisition and reopened in June 2013. Performance at the site during 2014 has been broadly in line with expectations. The Steampacket in Swanwick, Derbyshire was purchased in May 2012 and was refurbished following acquisition. Whilst the site initially struggled to attract trade, performance has shown a significant improvement in 2014, with sales showing strong like-for-like growth on the prior year. The Queen’s Head in Heanor, Derbyshire was purchased for £330,000 in December 2012. The site is an established real ale community public house and was acquired in good condition without the need for refurbishment. The site continues to perform in line with expectations. In March 2014, Autumn’s fourth acquisition, the Marr Lodge near Doncaster, reopened following an extensive refurbishment. The site has been established as a quality family friendly destination dining pub, under the 'Fresh & Local' concept, which has been successful at other Pub People managed sites. The site has been well received since reopening and sales have so far outperformed expectations. In June 2014, Autumn acquired the Thorn Tree in Ripley, Nottinghamshire from Marston’s. The site was acquired (along with The Nag’s Head and The Three Legged Stool) for a total of £785,000. The pub is in the centre of town on an established drinking circuit and Pub People will aim to exploit the weekend trade with suitable entertainment and drinks offers. The pub is to undergo a minor refurbishment in due course. The Nag’s Head in Chesterfield, Derbyshire was also recently acquired from Marston’s. The pub is located in the Newbold suburb of the town, which has a strong cask ale following. A minor refurbishment is planned to place the major focus of the offer on the cask ale market. In June 2014, Autumn acquired the Three Legged Stool in Worksop, Nottinghamshire from Marston’s. The pub is currently undergoing extensive renovation to reposition it under Pub People’s food-led “Fresh & Local” concept, which is proving successful at other sites. In July 2014, Autumn acquired the Plug & Feathers in Glapwell, Derbyshire for £745,000. The pub was acquired without the need for any further improvements, having been substantially refurbished in 2013 to reposition it under the 'Fresh & Local' concept. Pub People have operated the site for a number of years and the established trade should help group cash flow while some recent acquisitions are building trade. In July 2014, Autumn acquired the Dukeries Lodge in Nottinghamshire for £905,000. Pub People operated the site for a number of years and it was extensively refurbished in 2012 in order to reposition it under the 'Fresh & Local' concept. The established trade should help group cash flow in a similar way to The Plug & Feathers. Works will commence shortly to renovate the letting rooms at the site which should improve future performance. In July 2014, Autumn acquired the Royal Oak in Burton upon Trent for £150,000. Pub People has operated this site for a number of years and the pub has been cash flow positive from inception.”
Stonegate site closed after underage drinking failure: A Stonegate Pub Company bar and nightclub in Cardiff City Centre was temporarily shut down by police because it served alcohol to underage drinkers, it has emerged. Varsity in Greyfriars Road was subject to a notice of closure by South Wales Police after failing two “test purchasing operations” on the availability of alcohol to children, a force spokesman said. The venue was ordered to close for seven days and a hearing about the case has been scheduled for later in February. A South Wales Police spokesman said: “In December 2014 South Wales Police conducted an intelligence-led alcohol test purchase operation in central Cardiff focusing on the availability of alcohol to children. Varsity failed two test purchasing operations and as a result South Wales Police served a closure notice on the venue which has resulted in the premises closing for seven days. Review papers have been served against the venue with a hearing scheduled with Cardiff Council later this month.” It is understood the club has been closed since the beginning of February but planned to reopen last night, Thursday. Propel wrongly reported the site belonged to Parity Bars, which runs the Varsity Bar in Richmond Road, Roath, Cardiff. We would like to apologise for the mistake.
Ireland to set minimum alcohol price: Ireland will set a minimum price for alcohol and restrict its marketing to reduce a level of drinking the country's health minister called a "public health emergency". The Irish drink an annual 11.6 litres of alcohol per capita, 20% lower than at the turn of the last decade but still among the highest in the OECD. The new laws aim to reduce consumption to the OECD average of 9.1 litres by 2020. Health Minister Leo Varadkar told Ireland's Newstalk radio: "It's not an attempt to introduce a nanny state, we're not trying to close down every pub, it's just a response to the fact that the majority of Irish adults drink too much and many drink very dangerously. We've some long-standing public health emergencies in Ireland: they're alcohol, tobacco, obesity and inactivity. We will never be able to afford or sustain a quality health service into the future unless we bend the curve on all of those things." The legislation will compel all alcohol producers to put health warnings and calorie counts on wine, beer and spirits. Marketing that appeals to children will be banned and advertising on television, in newspapers and in cinemas will be restricted. The companies will still be allowed to sponsor sport events.
