Railway arch rent rises ‘could put breweries out of business’

A tenants’ charter was published yesterday (22 October) after business owners’ long-standing concerns about rising rents following a private takeover.

Network Rail sold the commercial property leases of all the arches in the UK in September 2018 but the National Audit Office (NAO) spending watchdog concluded it had not “explicitly” considered how to protect tenants in the sale.

A lack of communication in the process of the national sale was the start of anxiety among several breweries operating under railway arches, including the Bermondsey Beer Mile.​

In the charter, the leaseholding Arch Company has committed to being a responsible landlord, working to agree suitable rents for smaller, long-term businesses and having a positive impact on local communities. 

More to do

Leni Jones, director of the Guardian of the Arches group, which negotiated the charter said: “These commitments are a good start. But there is a lot more to do before tenants will start to feel secure and fairly treated.

“Large rent increases continue to be imposed on the estate, which will push small firms out of our cities and potentially out of business.”

The director of a south London brewery, which wanted to remain anonymous owing to a rent review coming up, said it had lost three friends and businesses from its street in the past year owing to the company’s “aggressive pursuit of increased rents”. 

John Hobday, chairman and co-founder of Anspach & Hobday brewery, in the London Bridge area, said it had decided to open a new brewery elsewhere.

He said: “Rents have risen so much that we don’t think it’s the right place to expand our brewing production. It’s just not the right place for industry really.

“It doesn’t make sense to be paying really high rents when beer is produced all over the country on land that is cheaper and, arguably, the arches should be cheaper – but they’re not.”

The brewery has received rent increases throughout its lease and fears rent could double in a review underway.

The NAO watchdog also found that rent charged for the properties sold could increase by 54% over the next three to four years.

Grateful to customers

Hobday said he hoped the landlord would engage more with the community following the charter.

He said: “The Arch Co deserves the chance to implement what they have said they're going to do and we look forward to that.

“A lot of people care very passionately about what's happened to the businesses in the arches and I'm very grateful to our customers for that.”

Karl Durand-O'Connor, said there were many vacant arches near London Beer Lab, a microbrewery he operates based in Brixton, south London.

He said: “Our desire is to expand at that location, but how feasible is it if these arches start to trade at similar prices to purpose-built industrial units with all that goes with them?

“There's been a lot of soul searching and sleepless nights over the whole thing.

“While the charter, I think, is a good step and it is a good leap forward, the jury’s out as to how effective it is going to be.”

Collective action

Durand-O’Connor recommended other breweries based under arches to join the Guardians of the Arches group, saying “without standing together the communities could fall apart”.

The Arch Company director Adam Dakin said: “Our tenants’ charter is our public commitment to engage with all of our tenants and communities in an open and responsive manner. 

“It sets out how we will address our tenants’ priorities in practice, make the arches better places to build, grow and run businesses and, above all, preserve the diverse and independent mix of businesses that make the arches so unique.”