The announcement by the government that all cafes, pubs and restaurants (except for takeaway services), theatres, cinemas, gyms and leisure centres must be closed has had a real sobering effect on the nation. It does feel like the heart of our community has been ripped away (albeit temporarily).

The drastic step taken by the government was deemed necessary in order to help reduce the spread of the virus. The health of the public is, of course, the top priority, however, social distancing comes at a significant economic cost and the leisure sector is certainly being hit hard.

This insightful article by Anthony Lorenz highlights the stark reality of what the leisure sector is now faced with and the difficult challenges which lie ahead for landlords and operators. With the March quarter date having now arrived, many operators find themselves with little or no revenue coming in. Whilst the government’s agreement to extend the moratorium on lease forfeiture for 3 months (so as to prevent landlords evicting a tenant for non-payment of rent during this period) provides a short period of grace, operators are desperately trying to find solutions which will help them pay their invoices and retain their staff.

It is hoped that landlords may be able to help provide some short-term relief by way of rent reductions, rent deferrals or other reasonable measures. As Anthony Lorenz quite succinctly puts it:

"a landlord has two choices.... “They can come to the rescue and help with cash flow and stick with current operators who know what they are doing. Or they can get the property back from a liquidator, because people will go out of business, and they will be faced with the challenge of finding someone else".

Discussions around different strategies are certainly taking place in the market. Those landlords that can be flexible and provide some support will hopefully see the benefit further down the line as supporting trusted operators whilst they ride this storm will help protect their own income streams once the market bounces back. However, whether this is possible, will depend on a landlord’s own financial position and commitments. Unfortunately, there will be some who simply cannot help, and operators will be left to rely on the financial measures introduced by the government (which have included the freezing of business rates for retail, leisure and hospitality firms for a year) to help them mitigate the effects of the virus.

It is clear that the property industry does have a vital role to play in trying to keep operators afloat. Whilst the enforced closures will only be temporary, it is likely that many businesses and jobs will have already been lost by the time order is restored and normal business resumes. For those businesses who do manage to survive, there will almost certainly be a period of adjustment and rebuilding in the short to mid-term.

It is hoped that landlords and operators are able to communicate and work together to help the leisure industry retain its place as one of the key economic and cultural sectors of society as quickly as possible.