F&B chains that took sites at inflated rents led to the increase, said Tim Martin, JD Wetherspoon’s chairman and founder. His firm had initially agreed to a rent of 10% of sales for a failed restaurant, paying £230,000, in Trafford Centre in Manchester, or, as Martin called it, “one epicentre of rental insanity”.
According to Martin, the landlord’s surveyor rose the rent to £691,000 per annum at Mardi Gras pub. He said: “The matter was referred to an arbitrator, who decided that the market rent was £415,000, about 20% of our sales, and just enough to ensure that the pub makes no money.”
Martin added: “Whatever the answer, the property market is again making a bad situation worse, by pushing up rents in the teeth of a vicious restaurant recession, and in a climate where three or four pubs are shutting down every week.”