The talented Mr Mallen
Currently representing the BII on the RICS Pubco Forum, Garry Mallen tells Phil Mellows what it's like to be a tenant, a landlord, a respected trade figure and a rent reviewer.
Garry Mallen's day job has kept him a little busier than he'd like of late. For every rent review he does there are two he has to let go.
"I've been trying to wind down that side of the business, but my profile keeps getting wound up," he says. "I'd managed to keep my head below the parapet in the past. I like it that way."
Anonymity, though, is a big ask for someone in Mallen's unusual situation. As well as the day job, a spin-off from the stocktaking and book-keeping business he set up in the 1980s, he has his night job running six pubs and bars around London. He also lets out two of his three freehold pubs.
"I'm a landlord and a tenant," he declares, sounding quite surprised himself. "But at least I'm a free-of-tie landlord!"
Add to that rare perspective his skills as a surveyor and it's easy to see why Mallen has been in demand — and not just as a rent reviewer. Last year, as a council member of the Association of Licensed Multiple Retailers (ALMR), he was part of the mediation meetings that proved unable to prevent the rift in the pub industry over the tie.
Now, representing the BII, he's on the Royal Institution of Chartered Surveyors (RICS) Pubco Forum, bringing his experience in rent reviews to the task of thrashing out a new, fairer approach to rents.
Perhaps we could do with more like him. Mallen believes high rents have been in part the result of a shortage of independent pub-valuation experts.
"High rents are not all the fault of the landlords. Tenants have not been represented properly and that's partly because of a lack of the kind of people they would trust to do it. Most surveyors are seen as being in the pubco camp.
"Tenants thought they could do it themselves, but they weren't aware of their rights. And while at one time estate managers would have done the negotiations for the pubcos, now it's business development managers. And they're not trained for it. They only know the company mantra.
"That meant we got ridiculous evaluations, way above market rents. Now we're trying to beat that back down."
Mallen welcomes Marston's recent announcement that it's ditching RPI-based rent increases.
"I don't know why RPI is used anyway," says Mallen. "Enterprise Inns has issued new leases with no rent reviews — only RPI rises, set in stone. They made a thing of doing away with upwards-only rent reviews, but RPI is upwards every time — and the upwards could be vast, frightening. My advice is don't take an RPI lease."
Tangled up in this, of course, is the question of the tie. Mallen operates both tied and free-of-tie pubs, and knows the score.
"I don't want to see the demise of the pubcos. But if landlords are being unfair to tenants the Government should use the threat of forcing them to offer free-of-tie leases. It's the biggest sanction they have available.
"I've met a lot of politicians lately and there's support for the Business Innovation & Skills Committee (BISC) report from every party and a definite desire that the incoming committee continues the work. The pubcos have irritated everyone and I expect the Government to continue with the timetable for them to put their house in order.
"The best gain we can make is a more balanced share of the economic benefits of the tie. It's got out of kilter. In 1994 the Spring Inns lease offered tenants 30% to 40% of the discount the company was getting from brewers. Now the average is less than 20%. Tenants are getting £45 a barrel, while discounts to pubco landlords are running at £200-plus. That disparity has caused a lot of grief. The pubcos have taken money from tenants to fund their own expansion."
Despite this, Mallen does not align himself with the militant anti-tie lobbyists. "If you take on a tied lease it's a legal contract. You can't rip it up and demand to go free-of-tie."
It's surprising, then, that he's a fan of the most vociferous of the lobby groups. "Fair Pint has done wonders for our interests. I don't agree with a lot of what it wants, but it has brought issues to the fore. As a lobby group it has been outstanding and punched above its weight. I don't think we'd be where we are now without Fair Pint."
It was, he believes, the group's lobbying that swung opinion on the BISC, which in turn has brought positive moves from pubcos.
But he's in a quandary. Success in the battle over the tie has, paradoxically, been a result of the split in the industry that allowed the ALMR, Fair Pint and the rest of the breakaway Independent Pub Confederation to put such a persuasive case. And the split, he agrees, has been damaging.
"It's meant the Government has got away with murder — the duty escalator, the Policing & Crime Bill. If we had been united that wouldn't have happened.
"But it's a strange situation. If there had been no split, companies such as Marston's would not have put an end to RPI rent increases, Punch would not have introduced new discounts, and important information would not have been given to tenants. These are all steps toward getting back on an even keel. We have seen some great benefits over the past 12 months. Thousands of lessees are now better off.
"But the Government has sneaked in through the back door. It needs to raise revenue and we've been an easy target."
Mallen is hopeful the split can be healed — but it's clear which body he blames for it.
"I don't think the British Beer & Pub Association turned up to seriously negotiate at the mediation. It was entrenched. It did not budge.
"But there will have to be more discussion between us so we can get on with our lives. We've got other enemies to watch out for. We'll never get one voice for the industry, but we can get a collection of voices to fight a common enemy, whether it's the Government, the police or the local authorities."
Mallen seems gravely dismayed at the failed mediation. Not only because of the lost opportunity for unity, but because he gets personal pleasure from successful negotiation.
"That's the bit I enjoy most — the debate, the discussion and the resolution.
"I get fed up with the extremes. If there's a dispute going on, I like to find a solution, but if there's no middle ground it's disappointing. There has to be a middle ground — and you have to find it."
At the moment he's searching for that middle ground on the RICS Forum.
"I feel in a minority and it's going to be a long process, but we're making progress," he says.
Mallen is a rare individual, dividing himself between so many different ways.
"I've never had a grand plan. I like a flexible lifestyle. I like to do many things at the same time."
The night job — the pubs — are not neglected, and Mallen sees opportunities for expansion as the country comes out of recession. He might even take a tied lease if the right one comes along.
"It's your family that gives you the highest points in your life, but next to that this industry provides lots of highs — as well as a few lows!"
My kind of pub
"The ideal pub for me is one that caters for people from all walks of life — the doctors and the dockers. And these days it has to serve good food, too.
"I've actually just sold a pub like that: the Dartmouth Arms in London NW5. If I'd lived nearer, the Dartmouth Arms would have been the pub I used most — it's a real locals' pub.
"But every pub has its price — and after all, I'm in business.".
Key dates
• 1983 — After working behind the bar for his father, Garry Mallen becomes manager of the Jolly Drayman, in Bexleyheath
• 1986 — Starts GC Mallen & Co, stocktaking & book-keeping business
• 1989 — Partnership with father, operating five pubs in south-east London
• 1996 — Father retires and Mallen goes into business with school friend Ian Gough to run six pubs and bars, including Bar Lorca tapas bars
• 1997 — First freehold pub, Bar Lorca in
