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Research by leisure property and lease restructuring specialist, Cedar Dean Group – covering around 600 restaurants in the city – has revealed the startling prospect that restaurants will have to adapt or die if rents and rates continue as forecast.
The report, released this morning, shows after the 2018 rates rise, 90 per cent consider their costs will be unmanageable and 84 per cent said they would have to either close down or move out of Central London.
The research comes as the city’s restauranteurs face the most challenging business environment in recent history. Prime central London has seen colossal rent hikes over the last few years, far outpacing those seen in the rest of the capital.
Perhaps most worryingly, this means restaurateurs are spending an average of 21 per cent of turnover on rents, already more than CDG’s forecast for 2021 and up from 16 per cent last year.
Historically, the maximum percentage of turnover spent on rent should be 12 per cent. But this has jumped by 70 per cent over the past five years and 140 per cent over the past decade.
Roger Payne, CEO, Camden Dining Group, said: “A number of restaurants are in serious trouble at the moment, predominately related to the rents and not assisted by legislation. Historically, the most successful rents have been under 12 per cent of turnover and as restaurants have needed to expand, landlords have taken advantage and rents have crept up because of demand.”
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