BPF pledge to stop sub-letting restrictions a boost for pubs

Moves by the British Property Federation (BPF) to make it easier for businesses to sub-let unwanted space will help the pub trade, says Colin Wellstead, director at Christie & Co.

He believes restrictions in leases have contributed to the difficulties some A3 high street businesses have experienced in recent years, making it difficult to sell on the leases of some properties.

The BPF has pledged to stop restrictions and allow businesses to let the space even if this is below the passing rent.

"This declaration is good news for the licensed trade, particularly for those companies where the rent being charged under the terms of the lease is not reflective of the property's open market rental value, given current trading levels," said Mr Wellstead, who is head of pubs and restaurants at the agent.

The problem with sub-lease clauses has become more acute in recent years as trading became more competitive, he explains. Many of the leases granted in the late 1990s, when the high street was a prime target for licensed operators, are no longer affordable as trading levels in some units have fallen.

"In the past, we would have sub-let a property, but because these clauses specify that you cannot sub-let at a lower level, we are unable to do this," Mr Wellstead said.

"Unfortunately, the only way some operators have found to get out of this clause is through controlled receivership, which enables receivers to hand back difficult sites to the landlord while decent assets are hived off into a new company."