The IMI 25th May 2022

Grassroots venue landlords ‘extremely willing to sell’ as MVT looks to step in with 50% rent reductions

Music Venue Trust CEO Mark Davyd reveals details and strategy of new Music Venues Properties project…

Yesterday (May 23 2022), the Music Venue Trust announced a new investment initiative designed to help grassroots music venues secure long-term futures through the buy up of freeholds from private landlords.

Drawing some parallels with Marc Geiger and John Fogelman’s SaveLive programme, Music Venue Properties – a Charitable Community Benefit Society – will raise money via Community Shares to fund the freehold purchases. By purchasing shares, MVT said that music fans and ethical investors will be able to help the cause whilst also receiving a 3% APR return on their investment.

Nine venues across England, Scotland and Wales have already been targeted for a pilot phase of the project, which will allow the scheme to establish proof of concept.

Speaking to The IMI following the announcement, MVT CEO Mark Dayvd revealed that MVP hopes to reduce rents for venues during the pilot phase by between 30 – 50%.

Furthermore, Davyd expects a lot of grassroots music venue landlords to jump at the chance to sell up and move their money.

On the nine pilot venues specifically, Davyd said: “There will be some negotiation at the end of this process but the principles [to purchase each freehold] exists. Overwhelmingly in this round we have landlords who are embracing this process; they recognise that their investment would be more secure and perform better elsewhere.”

Speaking more broadly, Davyd added: “Given the post pandemic reality, and the losses sustained by landlords, added on top of the historic difficulties between property owners and music venues operator tenants, our engagement so far with landlords and their legal representatives suggests they will be extremely willing to sell. This is a logical position; a commercial landlord’s optimal tenant is quiet and well financed. Two things that implicitly venue operators are not.”

As well as an immediate rent reduction for venues on completion of any given freehold purchase, MVP pledges to contribute to venue building repairs and insurance, while also guaranteeing long-term security.

Music Venue Trust CEO Mark Davyd.

However, rent reduction is the number one priority for the project, with Davyd pointing out: “Post pandemic, where significant new rent debt has been accrued by venue operators who are running venues with very low profit margins, it has risen to be the most prevalent cause [of music venue closure].”

And, should a venue be forced to close its doors despite the rent reduction and support offered by MVP, Davyd hopes to tap into the Trust’s network of experienced operators to ensure a grassroots music venue remains on the site.

“We have a network of over 900 venue operators, employing over 11,000 staff with experience of running a grassroots music venue,” he pointed out. “In the event of the termination of a tenancy by any venue operator we will offer the tenancy to another individual or organisation that can deliver the service the local community needs.

“In the event a music venue is closed due to external factors, such as development, Music Venue Properties will work with developers and local authorities to ensure that a replacement venue is a condition of the closure of the existing facility, using Section 106 powers.”