NTIA & Global Mutual Tenants Group exposes the dealings of Global Mutual and how they are failing tenants, with their primary objective focused on increasing the value of the Ei portfolio for resale.
Global Mutual, an investment and management fund, purchased some 370 primarily freehold sites from Ei Group (formerly Enterprise Inns) in 2019. It has Jersey-registered Tavern Propco to oversee operations that in turn has commissioned all ‘management’ to Savills.
Many tenants had negotiated hard for a free of tie lease from the Ei Group and needed a fair, long-term business model to thrive under. It has now, however, become clear for the tenants that Global Mutual sees them only as an investment and possibly a short term one at that. Indeed, they sold on around ten London pubs the day of purchase from Ei and tenants are hearing from their Global Mutual representatives that they are actively trying to sell sites and currently have no plans to support their tenants during the Covid-19 pandemic.
Tavern Propco will not be interested in looking after tenants because they have no desire to actually be a pubco as the only objective is to increase the value of the Ei portfolio for resale as soon as possible.
The rent collection has been subcontracted to Savills and Global Mutual’s operations support, and resources allocated to it, appear to be minimal. They have appointed Andy Price and Jeremy Hansbro, both from pub or Enterprise Inns backgrounds in order to bridge the gap, but so far it has been of little help to tenants. Statements about all management tasks and rent issues having been delegated to Savills are now being made in the past weeks. This means Global Mutual is attempting to distance itself and hiding behind Savills that of course has no industry-specific duty of care or knowledge. Rents payable on empty properties next March will not be paid by Savills, but by the real owners – Global Mutual.
The question here is: Where does it all leave the publicans, the individuals, the sole operators, families, local employers, tax payers and important community assets that are at the mercy of an international investment fund and their agent, both of whom lack knowledge about the industry, the difficulties ahead even when the restrictions are lifted, and simply don’t care?
It is for that reason that the tenants of Global Mutual have united and hope to make a valid point that their livelihoods and decades of hard work are not to suffer from ruthless investment strategies, better left to be utilised on commodities such as gold and diamonds that cannot be made homeless and left vulnerable, whilst some rural areas may end up without important amenities altogether.
Says Michael Kill, CEO, NTIA:
“On the Global Mutual website they proudly state that they have one of the largest free of tie pub estates in the UK. This statement in itself insinuates pride and a duty of care. When one wears a badge of honour like that, one has to deliver. This is about people’s lives, communities and the creative industries. As demonstrated during the lockdown, the pub and bar culture is so ingrained in our society and so quintessentially British, that it should not be targeted by investment funds looking to make a quick buck without pulling their socks up and doing the right thing at an unprecedented time like this. Global Mutual claims to be up there with the big boys and most of the big boys are helping their tenants big time while Global Mutual has offered nothing.”
Rob Star, Electric Star Pubs: “I was really pleased to be approached by fellow Global Mutual tenants, who have united in this time of adversity, to have a collective conversation with our landlord on the issue of rent. The government has done a great job with the furlough scheme which is helping to save millions of jobs, we now need support from Global Mutual to help us through a time when we have had zero income and the prospect of greatly reduced turnover when we do finally start pulling pints.”
Adele Feeney, The Crown at Iverley: “It’s imperative for our survival that our landlords, Global Mutual/Tavern Propco support us during our period of closure and then for some time to come post reopening. At this point in time they are only suggesting deferring rents, with no indication as to when and how these deferred rent payments will be required to be paid.
This is an untenable situation on many levels. We cannot afford to be paying double rent when we return. When we do reopen, we will be trading at a fraction of our usual levels, and the income that we’ve derived in the past from functions in our tipi at The Crown will be non-existent. So, our only chance of survival is for our landlords to help shoulder some of the financial burden that this crisis has thrust on the hospitality industry.
The stress and anxiety this is causing is taking its toll on many. We are sat in a position where we are unable to confirm to our team whether there will be jobs for them once the Job Protection Scheme ends, because Global Mutual can’t confirm to us what our commercial terms will be going forward.
Global Mutual’s mantra is that pubs are unique businesses so there isn’t a one size fits all solution. Whilst I am sure that each pub does have some uniqueness, we also all have one thing in common: we are shut, we have no income, when we return we will be trading at a fraction of normal income, therefore the one size that fits all is to waive rents while closed, and offer a significant discount on rents once we reopen, for as long as we are in a position that we need to adhere to strict social distancing rules.