They’re not the only restaurant having trouble agreeing Covid terms with their landlord
Co-owner of Tampopo restaurants, David Fox, has announced that the Piccadilly branch of the independent Asian-inspired chain will not be reopening after unsuccessful discussions with landlords Legal & General.
He explained the reasons why in a statement:
“I had approached the Landlord (L&G Pension Fund) to see if they would consider a turnover based rent to allow us to trade during this period. This was rejected with no alternative offer suggested. They are seeking full payment of rent and service charge, including for the period we were closed. In my opinion for a Landlord with less than 8% of its portfolio in city centre retail and leisure this is neither fair nor reasonable. This has left me with no option but to close the site.”
With restaurants you don’t know if this is the low ebb or if it’s going to get even worse
Admittedly, Tampopo took a chance on the Piccadilly Gardens unit when they opened their third city centre branch there as Tampopo East Street in 2018. They'd hoped to improve the area alongside larger chains such as Shoryu Ramen, Pizza Express and Barburrito.
We rang David Fox to see if we could get some more details on why they had to call it a day.
“Piccadilly Gardens is a tough gig at the best of times,” he said. “We were just at the arse end of it though. The benches outside where all the drug dealers were and the rough sleepers hang around there rather than further along. So it was a bit of a gamble and I’m half glad to be out of it really. I imagine the landlord won’t be able to let it again soon.
“Piccadilly does feel like a war zone sometimes, with the combination of drug and alcohol abuse. There’s no doubt that the police, the council and all the other public sector bodies are doing what they can, but it just doesn’t feel like it’s getting any better.”
In fact, Fox reckons it’s getting worse and as a result, more and more people are moving out of the area.
“As far as I’m aware, two floors of the L&G offices are vacant. Their managing agent even moved out and I know there’s a move away in terms of occupancy,” says Fox. “The council and landlords there need to be very careful. Piccadilly Gardens will always be an integral part of the city. You get more visitors to the city there because it’s near all the hotels. You’ll get people up for a three day conference and that’s the first impression they get of the city centre.”
Has David’s team had bad experiences?
“Oh yeah, loads of trouble. We’ve had someone come in with a broken glass, we’ve had people needling up in toilets. I’ve had more trouble in Piccadilly Gardens in the past year than I’ve had in the last 20 years in Albert Square or the Corn Exchange.”
These issues were also highlighted in Tampopo’s statement:
“Whilst there was a will by the council to improve Piccadilly Gardens area with investment, the resulting pandemic has put paid to/seriously delayed that. Covid has also hit Piccadilly Gardens hard as it relies on office workers (many of whom who were already vacating Piccadilly Gardens pre Covid) and visitors to the city – with many hotels in the area either closed or vacant. This makes the Landlord’s decision to not offer any support all the more short sighted.”
Fox says he has been negotiating with L&G since April, yet they have only just come back and said no. Fox can’t understand why they’re being so immoveable.
“It’s quite odd because L&G put out a statement saying they were looking to do turnover rents,” said David. “While I don’t doubt that property is in a bit of a pickle, they’re not as exposed as a lot of landlords in terms of retail. They’ve got more flexibility than most. They do not have to say they can’t accept it because the banks wont accept it in terms of covenant. I’m just slightly perplexed as to why they couldn’t even come back with a ‘that doesn’t work, but this could’ kind of thing.”
Tampopo’s other restaurants in the Corn Exchange, Albert Square and in the Trafford Centre remain very much open for business, for bookings or walk-ins and for click & collect, although Fox admits that he and many other restaurant tenants are having trouble getting a straight answer from the landlords of those sites as well.
“I’m in discussions with the Albert Square landlord, but nothing agreed and zero communication from the Corn Exchange landlord,” admits Fox. “I’ve written to him on a couple of occasions and haven’t heard anything back. Everyone else is in the same boat. There’s a potential liability building up and we would like to have some feeling as to what the sentient of the landlord is. At the moment we have no idea.”
Like Tampopo, many city centre restaurants have had to withhold rent payments after being closed for the three and a half month lockdown period. Now they have the threat of hefty rent bills looming over them despite suffering a severe drop in trade. David argues that this is likely to affect independent venues more than the larger chains.
“Bigger companies have the pockets to do CVA’s and other companies are going into pre-pack administration, largely so they can negotiate new rent deals,” he reasons. “In the worse case scenario, everyone around you will have done a CVA, you’re the last person standing and then the landlord comes chasing you for 100% rent and then you will definitely go bust.”
Does he think that it would be better for operators to close their restaurants and opt for financial support?
“They’ll lose less money, but if you’re shut, then you still have to negotiate the rent liability with your landlord. They’ll be bills for heat, light and power. There’ll be costs for closing and costs for reopening. You’re still incurring thousand in costs, so it’s preferable for you to keep ticking over. It’s not about making money anymore, it’s about losing less money.”
David Fox reckons Tampopo are now down to about 35% like for like annual sales. “With restaurants you don’t know if this is the low ebb or if it’s going to get even worse,” he says. “Central Manchester has taken a bit of a battering.”
“The ideal outcome would be that people are coming to socialise in a Covid safe environment such as our restaurant rather than in their houses, which is where all the infections are happening.”
Manchester, wondering what Tier 3 means for Tampopo?
Nothing! We will be remaining open and serving you delicious pan-Asian food!
Take a read about some of the safety measures we have in place for both you & our staff. pic.twitter.com/RorOzsnHmj
— tampopoeats (@TampopoEats) October 23, 2020
Tampopo’s official statement ended on a positive note:
“The challenge we at Tampopo have is unchanged. To make sure every customer leaves with a smile on their face by creating a moments of happiness in their day. This is especially relevant in today’s mad world and which great service and food has the unique ability to do. With the help of our customers we will get through this.”
For more information on Tampopo restaurants, opening hours and the menu. Visit their website.