What is Pub, Restaurant, Bar and Takeaway Property
Worth Now?

Chair:
David Coffer, Chairman, Davis Coffer Lyons; President and Founder, Restaurant Property Advisors Society; Chairman, Earls Court and Olympia

Speakers:
William Juckes, Partner and Head of Food and Drink Sector, Clarke Willmott
Duncan Lillie, Partner, Shelley Sandzer
Brendan McLoughlin, Director of Property and Developments, Luminar plc
Richard Negus, Head of Restaurants, Fleurets
Mary-Jane O’Neill, Planning and Development, Drivers Jonas
Tim Helliwell, Relationship Director, Hospitality & Leisure, Barclays
John Walker, Area Team Leader, Planning, Westminster City Council

THE CHANGES: THE REGULATIONS AND PROCEDURES FOR ESTABLISHING USE AND OBTAINING A CHANGE OF USE
• Background/what is the use class system: Use Class Order 1987
• The new 'evening economy' and the need for stricter planning controls - examples - London, Newcastle and Nottingham
• The value of A3 use? Changes to the use class system - amendments 2005: new use classes and permitted development
• Defining the primary use/mixed use/subdivision and intensification of uses - gastro-pub v restaurant/hot food take away v restaurant
• Unimplemented planning consents

ESTABLISHING WHAT THE USE IS: PROBLEMS AND SUCH SOLUTIONS AS ARE AVAILABLE - A LOCAL AUTHORITY PERSPECTIVE
• Sandwich Bars – A1 or A3 – The changes do little to clear up when they creep into the A3 Use Class
• Coffee Shops – Are they really an A1 use? The changes muddy the waters even further and some might be A1, A3, A4 or even Sui Generis!
• Class A3 – Restaurants and Cafes – Many restaurants rely on takeaway facilities or bar areas to supplement their income. At what point do they become Sui Generis and what are the implications?
• Class A4 - Drinking Establishments – The word alcohol is missing from the definition in the Order. Is the Circular enough to restrict this class to pubs and bars? Will the serving of food on a Sunday afternoon take you out of this use class? Has the Village pub been saved?
• Class A5 - Hot Food Takeaways – Are chains such as Burger King and MacDonalds A5 uses or does the seating/eat-in element take them out of the class altogether. What are the implications?
• Nightclubs – When does a pub or restaurant become a nightclub? The implications of introducing dance floors and late night entertainment to pubs and restaurants
• Conclusions: Implications for Local Authorities and Planning Inspectors – More work for Planners, Businesses and the Lawyers?

CONSEQUENCES FOR CAPITAL VALUES
• Food and drink market analysis
• Current bases of valuation and influencing factors
• Understanding the reasons for change
• Review of market demand and who is most affected
• Impact on A3 values
• Grey Areas and practical considerations

WHAT TO ARGUE AT RENT REVIEW AND LEASE RENEWAL
• Rent review - how permitted use will be interpreted now. Interpreting the terms of rent review clauses in existing leases
• Lease renewal - what should the permitted use be on renewal? Should the use be widened or narrowed? Should the rent review provisions be altered to reflect the changes to the use of class order?
• Case studies
• Long term impact on the sector
• What is starting to happen in the market?

KNOCK ON EFFECTS FOR LEASE TERMS AND CONVEYANCING PROCEDURES
• What has changed/what should change:
- rent review provisions
- tenant's obligations
- alienation
- handling conflicts between compliance with planning and authorised use under lease
• General Permitted Development Order and leases - can the tenant swap use classes?
• Importance of pre-contract enquiries and preliminary searches. The questions to ask, the answers to give and the searches to do
• Draft user and rent review clauses

IMPLICATIONS FOR LENDERS
• What’s happening in the sector?
• What are the key industry drivers
• Key issues for a lender
• How can you structure a deal
• What does a lender look out for
• Implications of the new regulation

OPPORTUNITIES THE CHANGE CREATES - ARE THERE ANY?
• What are the Grey Areas?
• Who is most affected?
• Do the Grey Areas create an opportunity or risk? Pricing the risk – profiting from incorrect pricing
• Practical considerations when altering or a selling your business
• Influencing the primary use
• Market reaction so far

SO WHAT SHOULD OCCUPIERS DO FOR THE BEST:
• To resolve uncertainties
• When taking a new lease
• To improve an existing lease
• To increase the value when selling
• When buying
• To ensure that the property is as valuable as possible when used as security for a loan