UK Pubs For Sale - UK Pub Sales Agents: RPI Increase Impact on Tenanted Pub Rents

RPI Increase Impact on Tenanted Pub Rents

The Retail Price Index (RPI) measure rose to 5.6% from 5.2% in August, according to the Office of National Statistics.

Fears: RPI increase will affect tenants due for rent review
With around half of the UK’s tenanted pubs having RPI increases written into their leases, this new rise will be a blow to tenants due for an annual rent review with pub companies who increase rent levels according in line with RPI.

The Consumer Price Index (CPI) measure was also up in August, reaching 5.2% from a previous 4.5%, as the UK's inflation rate rose in September.

Analysts claim an increase in energy costs was behind a large proportion of the rise in the inflation rate.

Leases that increase rent in line with RPI and CPI are not new. But they have become increasingly prevalent in the last couple of years and around 60% of all agreements within the Enterprise Inns estate, for example, have annual rent increases in line with RPI.

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via pubs-for-sale.biz

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