The Market Rent Option, MRO the aspects that need serious thought.
An interesting hypothesis, the Pub Co’s say that the cost of going Free of Tie will obviously be reflected in the loss of business income to them, which is supposedly substantial, the rent increase will therefore have to reflect that loss, but the MRO has to be gauged on the market rent in the catchment area for that business, something ignored by many surveyors, who prefer to resort to the questionable use of Comparables.
Having let a number of commercial properties, including pubs it is easier said than done to actually get the true Market Rent without some serious research.
A very accurate assessment of the value of the property as a pub and it’s existing business, catchment area including failed and now closed pubs, pubs that have been granted planning permission for change of use within that area over the last few years, all these factors have to be considered to arrive at a genuine Market Rent.
The assumption that being Free of Tie is the salvation for all tied tenants, it could be for both landlord and lessee, if used the right way.
The first company that will suffer will be Brulines, possibly the most hated of companies linked to leased pubs, a serious inhibitor of business growth in the way their technology has been used or misused, it could be a great business asset for stock control and trading information, especially places with a large staff. MORE