Viewpoint: Café culture. The pros and cons of creating caffeinated working environments
Estates Gazette has been looking at the concept of the
cafe office co-working environment, evaluating what customers and
workers want from such a space. But what are the implications for
occupiers and landlords of combining the two?
Andrew Marshall, looks at the
regulations and issues involved.
Are food retailers missing a trick by allowing customers to
work in their café without charging a rent?
Who hasn't had a meeting in a coffee shop, or sacrificed the
diet for a flapjack and latte in return for a couple of hours
sending emails using the free wifi? It is fairly commonplace these
days, and the relaxed atmosphere is increasingly attractive for the
younger generation and the growing freelance workforce.
There is an argument for allowing the informal use of eateries
for those clearly working, after all most people will at least
order a few pounds-worth of goods, and their presence can help an
empty venue seem more interesting and full.
But, if these customers turn into tub-chair-hoggers eeking out a
single cappuccino all day, it's easy to see where operators might
feel they are losing revenue and potentially missing a trick by not
charging a rate.
Regardless of the unpopularity of such a move, and the potential
of alienating a large portion of the customer base, there are
significant regulations which would affect any cafe operator
looking to charge for space, whether that was informally done or
tables set aside in a dedicated "work zone".
Consulting the lease would be the operator's first task, there
are likely to be clauses that exclude the use of the space for
other businesses. Leases are intentionally strict, in part to
ensure the landlord can be confident in the ability of the tenant
to pay their rent, and variations are not often welcomed as they
require a repetition of the due diligence, legal procedures and
There's the chance it could be considered the space has been
otherwise assigned, which is a legal matter that could also void
the tenants's lease. Landlords could allow for the lease to be
changed by deed of variation, but would they consider it to be in
their own best interest?
From the landlord's perspective, any move towards creating the
precedent for office space within a retail unit is likely to be
opposed, if only to avoid any bid by the operator to reduce their
rent, as office space is traditionally much cheaper per square foot
than retail. And an operator who successfully demonstrated the
change would significantly boost their business, could face a rent
hike at the next review.
And then there's the local authority interest. Food retail is a
different user class to office space and there is the danger that
the operator could be in breach of planning permission. The
Valuation Office may even come knocking with a bill for an
increased business rates if the premises could arguably be
described as an office space, with a loss of the rate relief
enjoyed by some food retail and licensed premises.
So altering the operation of an existing business may not be the
easiest of moves. But that's not to say there's not a place in the
market for an operator offering a mix of food retail and office
space. Informal working environments are increasingly popular and
it may be that landlords themselves could even be open to the
prospect of two operators working together to provide a mixed-use
facility, especially in some of the high number of empty high
street units up and down the country, if the business plan stacks
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