‘Fag end’ Lease of Pizza Hut Beckenham sold to Prezzo

Tenant: Pizza Hut

Landlord: Landmaster Properties Limited

Purchaser: Prezzo

In the spring of 2009 Fleurets was instructed on behalf of the tenant, Pizza Hut, to market their leasehold interest in an 80 cover restaurant with adjoining vacant shop premises. The restaurant was ideally located at the centre of the High Street of Beckenham and close to a number of multiple operated restaurants including; Zizzi, Nando's and Pizza Express.

The restaurant lease was approaching the end of its term (December 2009) and Pizza Hut had decided to relocate its business out of town and therefore did not wish to renew their lease. Facing a claim for “stripping out” costs and dilapidations from the landlord, Pizza Hut sought to present the landlord with a new tenant who could benefit from some of the restaurant fixtures and fittings and thereby help mitigate Pizza Hut's dilapidations costs and at the same time provide the landlord with continued rental income.
 
This transaction was somewhat complicated by the fact that Pizza Hut also leased an adjoining shop which the buyer, Prezzo, wished to extend the restaurant into, and accordingly planning for change of use of the shop to restaurant (A3) and similarly landlord's consent, had to be gained. This was further delayed by the local planning authority advising Pizza Hut to apply for a certificate of lawful planning use (as the shop was believed to historically form part of the restaurant), rather than planning permission for change of use, only for the authority to reject the application. However, eventually planning permission was granted and terms for a 20 year new lease were agreed between the landlord and Prezzo.
 
The outcome was that the landlord ended up with a quality tenant on a new lease, who heavily invested in the premises. Prezzo naturally ended up with a new restaurant to add to their 140 restaurant portfolio, and Pizza Hut avoided a substantive claim for dilapidations.

Interestingly, Prezzo had approached Pizza Hut at the height of the market in 2007 to investigate whether they would sell the unit and at the time were prepared to pay  a six figure premium, however as the market worsened and Prezzo “took stock” the deal collapsed. Prezzo have, in recent months, increased their acquisition activity seeking to capitalise on the many opportunities currently available.

For details of other Pizza Hut restaurants for sale please go to: www.fleurets.com/pizzahut