Often, rent reviews are based on frontages, square footage and the commonly used Zone A methods. After almost 20 years of disposing and acquiring restaurant spaces in London, I can safely say that it’s not so much the size that matters but really the quality and feel of a space. I.e. - the walls, the floor, the exteriors and probably most importantly the ceiling heights.
Richard Caring’s latest brainchild and roll-out, The Ivy Café, made it clear that they want character buildings. Even if a large enough space was to become available in the right location, if it doesn’t sit within the right type of character building, it wouldn’t be of interest to them. Rest assured for the right buildings they are willing to pay substantially more rents than the ones that don’t fit the bill.
Ceiling heights play another important role as diners enjoy going to environments with dramatic ceiling architecture as it enhances the atmosphere and dining experience. I think a great recent example of an operator exposing and using head heights to a great advantage is Gymkhana, previously the Korean restaurant Kaya. In its previous incarnation as a Korean restaurant, the ceiling heights were low and unexposed. JKS Restaurants did a superb job in exposing the head height and the environment which ultimately transformed an unpopular restaurant into one of London’s true destinations.
(Gymkhana restaurant)
These points are often overlooked during rent reviews and show that rents cannot be compared like for like. A suggestion I have been deliberating on recently is that every rent review should be put to tender, and the average of three offers from third parties should be the newly agreed rent. This would be a real market force as opposed to hypothetical arguments between surveyors which don’t take into account the ground facts.
Eating out has become increasingly important to individuals, working professionals and families. Good food combined with top-notch service are not the only elements to be treated with importance. Effective use of space, ambience and dining experience is taking preference in this highly competitive market. Environments which are innovative, exciting and feel more airy will certainly succeed. However, from a rent review perspective it is virtually impossible to compare them.
(Gymkhana restaurant)
