The health of the High Street and other commercial and town centres is significantly affected by the retail environment. And few retail sectors have been so badly impacted by the recession and changes in legislation than the pub sector, writes Simon Broadbent, CEO of specialist contractor Secure Empty Property.
Recent reports indicate that 31 pubs are closing each week in the UK. Pub numbers have fallen from 68,000 in 1982 to 48,000 in 2013 – a 40% decline. Overlooking the nostalgic handwringing over the demise of our favourite local, this creates a dramatic change in the profile of town centre property and so creates challenges for the local authority. The economic impact to the authority of lost jobs and diminished business rates income is exacerbated by the blight on the high street of another vacant property. Vacant pubs, or voids, are a magnet for crime stimulating and becoming a focus for vandalism, theft – especially metal theft – squatting and even arson. Worse, badly managed void pubs can have a wider detrimental impact to the adjacent shops and high street creating a spiral of decline.
For some perspective, void rates in the retail sector are improving slightly from an average 15.1% to 13% more recently however this improvement is very location dependent – 23% of shops are voids in Lisburn NI for example.
Few industries outside the pub sector have faced the ‘double whammy’ of recession and constricted retail spending, as well as legislative interference. The proportion of beer sold in pubs versus at home has dropped from 68% in 2000 to just 50% today due to intense price competition from the supermarkets. Add to that alcohol duty, VAT, business rates and inflationary energy bills and the commercial challenges keep coming. Recent controversial changes to the ‘beer tie’ system could also damage the industry. Here, all tied tenants would have the right to request a rent review if they have not one for five years together with the option for pub landlords to buy beer on the open market. The British Beer & Pub Association claim this new Bill could result in more pubs closing with 7,000 job losses as the pub management companies are deterred from investment in their property portfolio.
The ‘snap-shot’ of void numbers however is too simplistic. The big pub companies are in a continuous process of upgrading, refurbishing, purchasing and divesting their property portfolio. It’s a significant challenge to match customers’ expectations in the pub facilities and its geographic location and local ‘foot-fall’. And the property portfolio can be extensive with companies such as Enterprise Inns and Punch Taverns managing 5,000 and 4,000 pubs respectively. Therefore a pub can be void as a result of investment in new kitchen facilities or change of ownership rather than a sign of neglect and dis-repair. However, as pubs undergo refurbishment, upgrading or divestment the void period needs to be managed to be fair to the high street community and to be ‘good neighbours’.
The challenge facing the Pub Co operator is to assess what measures are necessary to protect the property asset whilst it is vacant ? Moreover, how can these measures be cost effective, support the refurbishment process, maintain the High Street ‘kerb-appeal’ and comply with their insurance companies policy requirements. Some of these requirements can be mutually exclusive so a ‘tool-kit’ of options may need to be investigated.
Taking the last requirement first, most insurance policies default to a very basic level of cover after just 30-days void period. Generally referred to as FLEA cover (fire, lightning, explosion and aircraft) the property owner is now very exposed to losses in the event of vandalism, squatting or theft. Such losses can make investment in on-going refurbishment unsupportable due to additional cost and significantly extended refurbishment time. Recent changes in legislation making squatting a criminal offence in residential property does not generally provide any additional protection to vacant pubs. Worse, the displacement of the estimated 22,000 full time squatters from residential property has heightened the risk to commercial properties and pubs. Significant levels of squatting attack is now reported in London and the South East.
Maintaining the property ‘kerb appeal’ with aesthetically pleasing physical security can also be problematic. The traditional approach of plywood boarding-up windows and doors creates an eyesore in what are often very public places and has a detrimental effect to the town centre and adjacent retail outlets. The true level of security offered by plywood boarding is also very limited and a determined attack attracted by the potential of high value metal, boilers or fixtures and fittings will not be prevented. The darkened interior also helps the intruders work undetected.
Finally, traditional security measures can effectively hinder the refurbishment process by delaying access to the property, causing damage to glazing, window and door frames and requiring artificial lighting as natural light is blocked.
The above issues can be effectively overcome by the use of bespoke security systems including anti-vandal doors and window screens and the use of specialist temporary electronic alarm systems. Where perimeter security is required, these modular products offer a high level of visual and physical security yet the specialist fixing methods cause minimal damage to the building fabric or fenestration. By allowing easy access into the site and natural light penetration, the refurbishment process is facilitated and the high-value items offered a proportionate level of security. The alternative, or complementary, approach is the use of temporary alarm systems to detect both fire and intruders. These specialist units are battery powered and communicate to remote Alarm Receiving Centres through GPRS mobile communications. This allows mains power to be isolated – normally an insurance requirement – and phone lines to be disconnected. Wireless detectors allow large properties to be protected without trailing wires. Both systems can be effectively utilised on Listed or protected buildings with minimal risk of damage to glazing, brickwork or fascia.
One pub chain, deploy a combination of temporary alarm systems and live-in Guardians to protect vacant pubs. This has the dual benefit of providing 24-hour security even when Guardians are out at work and a ‘lived-in’ appearance to deter intruders. Guardians can report minor problems at the property without costly inspections but they can be more financially beneficial with regard to mitigating Empty Property Rates. Supporting a change in registered use from vacant commercial property to occupied residential property which incurs standard council tax, the overall cost saving can be significant. Success rates in achieving this change of registered use varies from council to council however, for longer-term voids, it is certainly worth exploring.
So there are a myriad of security solutions to meet the challenges of empty High Street pubs. However the one-size-fits-all approach of the traditional security company may not meet all the stakeholders requirements. Insurance company’s knee-jerk recommendations for void security tend to be either static guarding or mobile patrols. However, 24-hour guards have a significant cost for the Pub Co and the security offered by mobile patrols – absent more often than on site – is generally ineffectual. Swinging in the opposite direction, boarding up damages both the property and blights the High Street with little real gains in security. Yet cost can be relatively low with a one-off installation charge. So value for money in vacant property security can be problematic to evaluate and very dependent upon the individuals viewpoint, the duration of the void, risk profile and ultimate objective of the owner.
As a specialist contractor in this niche marketplace, Secure Empty Property offers clients a wealth of knowledge which is shared free of charge together with a detailed risk, health & safety and security report on each property. By having a range of security solutions and wider property services, the best-fit solution can be delivered nationwide from a one-stop-shop. A unique resource is available to property owners and managers in a web-based ‘Risk Slider’ which profiles different risk levels to property types and provides security recommendations. This resource can be found at www.secureemptyproperty.com