Covid-19: how London’s West End will bounce back I FT

How will businesses in London’s West End recover after the coronavirus pandemic? FT property reporter George Hammond looks at how the tourism and entertainment hub can recover from rolling lockdowns after plummeting visitor numbers put landlords, retailers and entertainment venues under strain

Central london has been hollowed out by coronavirus the tourists who normally pack these streets are unable to travel the shops have been forced to close in the west end world famous for its theaters and nightlife coronavirus has been particularly cruel perhaps its most iconic address covent garden has been emptied by the pandemic today we’re pretty much the only

People here and that’s how it’s been for much of the last 12 months that’s been a huge problem for bars restaurants shops and the property owners that own this estate and much of the wider area in soho chinatown and beyond we’re here to find out how they’ve been surviving the pandemic and how they’re preparing for life beyond lockdown brian bickel is the boss

Of shaftsbury one of the west end’s largest landlords we’ve got some 615 restaurant shops cafes bars pubs and clubs so they produce 70 of our income this time last year 23rd of march the football tap was just turned off i mean it had been dwindling for a couple of weeks beforehand but to see the west end completely deserted to people it was like a scene from

An apocalypse movie you would never have dreamt it could happen london has been hard hit by the pandemic with the city under some form of lockdown for the bulk of the last 12 months hopes of a return to something approaching normality were raised last summer and again over christmas but on both occasions business owners looked on despairingly as the country

Was placed under lockdown ranjit matharani is the chairman of mw eat which runs the casual dining chain masala’s own his company has restaurants in covent garden and nearby in soho we had to be sending out constant messages to staff to customers whatever that the realities had changed from week to week and from month to month and so that whole process was

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Was actually very very demoralizing for our staff as well as for our customers losses we would incur last year would probably wipe out five years of profits before ian hawksworth is the chief executive of capital and counties owner of covent garden and the surrounding streets he says that constantly changing rules have made life hard for tenants on the estate

The run-up to christmas was very good for a lot of our brands and then obviously we were locked down again so it’s been stop start quite difficult and quite costly for everybody i think rolling lockdowns have put pressure on both tenants and landlords shops restaurants and bars have lost their income for key portions of the year and many have struggled to pay

Rent that strained relationships with property owners and pushed some businesses to the brink some of the well-known west end large estate landlords were more receptive we have other landlords who have been much more hard-nosed and some have been totally intransigent so at this point in time we have not found any landlord as yet willing to change the lease

Structure i think there will be a whole range of restaurants which are less well capitalized which have got uh weaker balance sheets uh and politically the smaller entities which will inevitably go under government support including the furlough scheme business rates holiday and a ban on commercial evictions have gone somewhere to help failing businesses and

Western landlords insist they’re doing all they can to maintain tenants and have taken a considerable hit to do so even so the number of vacant properties in the west end has spiraled on sharpsbury’s estate the vacancy rate has troubled over the last year the best way to preserve uh value in our portfolio is to keep it occupied so that was our view of coming out

Of this we wanted our buildings to be as shops and restaurants to be able to open quickly the football come back and we wanted people to come back to these areas i think across the west end we’ve we’re seeing more vacancy than we’ve ever seen in the past normally the west end is full and for our business we run in normal times at sub 3 vacancy level and that’s

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Generally frictional churn where we’re just getting space back and re-letting it nothing hangs around for very long rents are set by supply and demand it’s quite simple equation really and if there’s more supply and less demand you know the rents will only go one way the hit to property owners in the west end has also been considerable the pandemic has wiped

Close to 1.5 billion pounds off the value of sharpsbury and capital and counties combined estates but there is growing optimism that visitors will soon return to the area as the government eases england out of its third national lockdown in four stages we will move to step two of our roadmap reopening shops gyms zoos holiday campsites personal care services

Like hairdressers and of course beer gardens and outdoor hospitality of all kinds the prime minister boris johnson has insisted that this will be the final lockdown and with the rollout of the vaccine there is cautious optimism about reopening rupert graves is the co-founder of catalyst laboratories a company providing covid tests he believes regular testing

Can help businesses in the west end regain confidence his company moved to the west end during the pandemic taking advantage of cheap rents as local offices emptied out it was quite an interesting experience finding property during a pandemic a lot of the flexible spaces we saw were basically empty and so we had a lot of certainly a lot of choice in terms of

Where we where we could go one thing we have noticed is that you know people with a negative test results do have a lot more confidence in terms of what they do we certainly notice that with film and tv productions and also theater productions covid testing and the vaccine rollout have given businesses in the west end a glimmer of hope i do not know the amount

Of light within the tunnel whether it be bright sunlight whether it be cloudy or where it will be a adaptive sky and neither do i know how long time’s going to be necessarily but we know we now can see the light in the tunnel it’s very important that once that momentum starts on april the 12th and then is enhanced on the 17th of may when the theater’s open

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Hopefully we’ll then see people coming back to the office and then maybe over the next six to 12 months you might begin to see the the an increase in visitor numbers into london from overseas we need all of those components and it will be a a relatively slow build i think over the next six to 12 months but i’m confident that the west end will prosper everybody

Has now stopped taking the west end for granted it was so reliable and so predictable it was the goose that always carry on laying the golden eggs i think now people realize it is going to need some help to get back on its feet even as they plot a path to recovery business owners are clear that govern 19 will leave its mark on the west end and are embracing

Changes to make the area more walkable and clean we’re able to work with westminster to make sure that we have an environment that people want to come to so there’s been a lot of pedestrianisation and we’ve put a lot of alfresco seating we’ve got over 800 outdoor seats now i think the expectation is it’s really going to be into next year and probably 20 23

Before we can see you know anything like a return to wherever before any recovery will be slow and the experience of a year of stop-start lockdowns has left businesses in the west end wary tourists are unlikely to return in numbers this year and there is still a question mark about what happens to the pile of unpaid rent which is built up thanks to the pandemic

To resolve those issues and persuade people that they can visit safely property owners and their tenants will have to work together as never before

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Covid-19: how London's West End will bounce back I FT By Financial Times

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