Greene King Pub Partners has announced a multimillion-pound investment in the next wave of financial support for its tied tenants to help them through the COVID-19 crisis, which will see rents reduced by 90% for all tied pubs from 11 June until they can legally reopen.
The 90% concession will continue during the first four weeks that a pub can legally reopen and then remain at 50% for the following four weeks, meaning support will run almost up to September at the earliest. As well as the rent concessions, the announcement also confirms that tied tenants will receive eight weeks of trade support when buying barrels of beer or cider from Greene King after they reopen.
The decision follows the first wave of financial support from Greene King Pub Partners that covered the initial 12-week period from 18 March to 10 June.
The first wave of support involved the launch of a Partner Support Fund and one-to-one discussions with all 975 tied pubs to understand their immediate financial situation and ascertain which pubs needed immediate rent concessions as they had not been eligible for any government grants. Pubs with a rateable value under £51,000 have been eligible for a government grant up to £25,000 to allow businesses to continue paying fixed costs, such as rents.
So far approximately £4m of rent concessions has been made by Greene King Pub Partners through its support fund to tied tenants to cover the initial 12-week closure period.
This latest additional support comes as Greene King continues to work with trade associations on making the case to government that further government support for the hospitality sector is needed as companies try to keep up with accumulating fixed costs while businesses remain closed.
All rents have also been deferred for Greene King tenants since 17 March while pubs are closed and then further support has been rolled out in stages as the national situation developed and government support has been used up.
Wayne Shurvinton, managing director of Greene King Pub Partners, said: “From the outset balancing as much support for our tenants as we possibly could alongside ensuring the long-term survival of Greene King has been our priority.
“By deferring rents before pubs were ordered to close we removed any immediate cashflow concerns for our partners and since then have reassured them that we would support them in every way possible when it came to rent and I’m very pleased to announce these latest measures today.
“None of us are immune to the financial implications of pubs closing and we all have to work together to survive this existential threat to our industry. I’m grateful to every single one of our tenants who has worked with us and trusted that we were doing all we could to look after them.
“We feel we’ve played our part and it is critical the government continues to play its part in supporting our sector. The support so far is extremely welcome but as a tenant ourselves with over 500 landlords, we have not received rent concessions in the way we are offering them to our tenants and further support on rent payments is needed to support the recovery of the pubs sector.”
On 25 March Greene King Pub Partners also pledged to replace all unopened kegs and casks in tenants’ cellars that will be out of date when it comes to reopening. Tenants have completed a stock survey of what barrels will need replacing and it is estimated the total cost of this support will be approximately £1.3m + VAT.