A recent article highlighted the significant decline in the number of nightclubs in the UK. The latest statistics from CGA Neilson revealed that between June 2020 and June 2024, 480 nightclubs closed in the UK, averaging 10 per month. Rising costs (rent/business rates, utilities) and changing social habits are some of the reasons for these closures.
I have witnessed this first-hand, being instructed by both landlords and tenants to assess dilapidations and apply the principles of Section 18 (Diminution in Value) to former nightclub buildings.
In one recent case, the client (former tenant) exited a property at the end of a 15-year lease, signed just before the Lehman Brothers collapse and subsequent banking crisis in 2008/2009. Despite spending over £2 million fitting out the building, it never opened and sat empty for the lease term, providing a significant burden and liability for the tenant. The property will never be a nightclub again, and this is the likely future for many such buildings that now become vacant.
As a result, landlords must seek to redevelop and repurpose such properties to find an alternative use. This, in turn, impacts the likely value of the buildings and subsequent dilapidations liabilities.
For more information and assistance with dilapidations, please email neil@dilapsolutions.com.
About the author
Neil has over 15 years of experience in professional and agency matters relating to commercial property throughout the UK and Ireland representing a range of corporate and private clients, investors and developers.
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