Premier Inn owner Whitbread asks landlords for 50% rent cut

Premier Inn, Beefeater and Brewers Fayre owner Whitbread has written to landlords saying it intends to only pay 50% of rent for the final three months of the year.

The letter, sent before the new Tier 4 regulations and seen by property news publication Costar, said the company had suffered “significant” net cash outflows in the first half of the year.

Whitbread told landlords it intended to deduct the payment from its quarterly rent due on Christmas Day, the letter added.

A spokesperson for the business said: “Throughout the pandemic to date, we have paid our rent commitments in full, even when our hotels and restaurants were forced to close.

“With ongoing Government restrictions expected to result in subdued market demand into the first half of 2021, we are now asking our landlords to support us, as other stakeholders have during the pandemic, through a reduction in rent for the December quarter in recognition of the current environment.”

Premier Inn closed the vast majority of its 800 hotels during the first national lockdown in March – keeping 40 open for essential workers – and reopened during the summer.

Subsequent lockdowns and restrictions saw further closures and a collapse in demand as tourism dried up.

It left Whitbread swinging to a pre-tax loss for the six months to August 27 of £724.7 million – including a £339.9 million writedown on the value of acquisitions in Germany.

Revenues fell 76.9% to £250.8 million over the period and in September the company announced plans to cut 6,000 jobs.

Whitbread also furloughed 27,000 people and tapped up shareholders for £1 billion, while scrapping dividend payments.

Commercial property landlords are facing an expected rent shortfall of at least £4.5 billion by the end of the year, according to recent analysis by management consultancy Remit Consulting, which analysed 125,000 leases.

Read Full Story Click here to comment

FROM OUR PARTNERS