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  • 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 theatres 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 Bickell is the boss of Shaftesbury, one of the West

  • End's largest landlords.

  • We've got some 615 restaurants, shops, cafes, bars, pubs,

  • and clubs.

  • So, they produce 70 per cent of our income.

  • This time last year, 23rd of March,

  • the footfall 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 of people,

  • it was like a scene from an apocalypse movie.

  • You would never have dreamed 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 Mathrani is the chairman of MW Eat,

  • which runs the casual-dining chain Masala Zone.

  • 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 actually

  • very, very demoralising for our staff,

  • as well as for our customers.

  • The losses we would incur last year

  • would probably wipe out five years of profits before.

  • Ian Hawksworth is the chief executive

  • of Capital & 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 their lease

  • structure.

  • I think there will be a whole range of restaurants,

  • which are less well capitalised, which have got weaker balance

  • sheets, and 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 some way to help failing businesses.

  • And West End 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 spiralled.

  • On Shaftesbury's estate the vacancy rate

  • has trebled over the last year.

  • The best way to preserve value in our portfolio

  • is to keep it occupied.

  • So that was our view in coming out of this,

  • we wanted our buildings to be... our shops and restaurants,

  • to be able to open quickly.

  • The footfall would come back and we wanted people

  • to come back to these areas.

  • I think across the West End we're

  • seeing more vacancy than we've ever seen in the past.

  • Normally the West End is full.

  • For our business we run in normal times

  • at 3 per cent vacancy level.

  • And that's 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 a quite simple equation, really.

  • And if there's more supply and less demand,

  • 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 £1.5bn off the value

  • of Shaftesbury and Capital & 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 camp sites, 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 Katalyst 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 that we saw

  • were basically empty, and so we had certainly a lot of choice,

  • in terms of where we could go.

  • One thing we have noticed is that people

  • with a negative test result do have a lot more confidence

  • in terms of what they do.

  • We certainly noticed that with film and TV productions,

  • and also theatre 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 in the tunnel,

  • whether it be bright sunlight, whether it be cloudy,

  • or whether it'll be a dappled sky.

  • And neither do I know how long the sun's

  • going to be out necessarily.

  • But we know, we now can see light in the tunnel.

  • It's very important that once that momentum starts on April

  • 12, and then is enhanced on the 17th of May when the theatres

  • open, hopefully we'll then see people coming back

  • to the office.

  • And then maybe over the next six to 12 months

  • we might begin to see an increase in visitor numbers

  • into London from overseas.

  • So we need all of those components.

  • And it will be 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 carried

  • on laying the golden eggs.

  • I think now people realise 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 Covid-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.

  • So we've got over 800 outdoor seats now.

  • I think the expectation is it's really

  • going to be into next year and probably 2023

  • before we can see anything like a return

  • to where we were 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 has 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.

Central London has been hollowed out by coronavirus.

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

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    joey joey posted on 2021/05/29
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