Restaurant leasing activity in London is hotting up, with at least four new restaurant brands chasing after central sites.
According to restaurant property agents, the London restaurant scene continued to grow, albeit slowly, during the recession and rent levels were sustained.
During that time the large groups were relatively quiet, but now existing groups such as Pelican and PizzaExpress are looking for more sites and new restaurant operators are appearing with novel brands.
Gary Coupland, a former operations director at Boddingtons, has taken a site next door to Stephen Bull restaurant in Blandford Street, Marylebone.
Mr Coupland is opening a seafood restaurant called Horners in the former wine bar next month. A rental of £27,000 per year was agreed for the 1,723sq ft shell site.
He has also instructed chartered surveyor Adlers to find further sites in the City of London, in the Bishopsgate and Smithfield area.
Paul Benjamin, associate partner at Adlers, said the restaurant property market was returning to the climate of 7-10 years ago when restaurateurs were willing to pay premiums to get good locations.
“Premiums were paid during the depths of the recession but it was a purchaser’s market. Premiums have to be justified more than during the 80s but they are being paid,” he said.
Mr Benjamin said he was also acting for another, as yet unnamed, client who has just acquired three premises in Chiswick, Esher and Southampton Row, Holborn. This client will operate two new restaurant brands.
Agents at EA Shaw & Partners have let a large three-storey site in Covent Garden to Sofra Restaurants which plans to open the first of a group of Turkish restaurants. Sofra has a second Covent Garden site under offer.
Craig Richie, associate partner at Shaw, said the demand for restaurants in Covent Garden was “as strong as it ever was”.
He said that in several cases restaurateurs were competing and winning against retailers for good ground-floor sites. There was not a big problem in getting change of use permission for restaurant development, he said.
In a recent case a former ground-floor office in Bow Street was let to PizzaExpress, which gained a change of use for the site after an appeal.
Sofra is paying £100,000 per year for the 3,200sq ft site in Tavistock Street. Mr Richie said that at £31 per square foot the rent was standard for Covent Garden. PizzaExpress is paying £40 for its Bow Street ground floor and £20 for the basement.