Yot Club to close as owner blames rent
Raglan business owners say a landlord monopoly in the small beach town is jacking up rents, forcing them out.
Prominent Raglan music venue and bar Yot Club will soon be up for sale because the owner Andrew Meek says he’s “had enough of the landlords”.
Other operators spoken to by the Waikato Times said there was a power imbalance between tenants and owners with some having seen up to 95% rent increases in less than a decade.
Meek rents from RNS DTR Limited and one of the shareholders in that company, Tony Bruce, says “everything is done by the book, and rent increase is based on valuation”.
Meek said he was selling his business because he’s “exhausted” dealing with liquor licensing and what he said was a lack of maintenance by the landlord.
Meek wanted to sell his business and said if it didn’t sell, he would shut the Yot Club by May.
“I hope that someone else can find a way through to maybe deal with the landlords, to maybe have a better relationship with police and licensing.
“This place means a lot to the community and there’s nothing like this in Raglan.”
Re-fillery shop SWOP closed shop on February 29 after over three years in business.
A Facebook post said “a significant rent increase” made it no longer sustainable to operate.
“This is incredibly disappointing for us as Raglan have been so supportive since we first opened with our journey to packaging free shopping,” read the post.
Waikato Times understands the rent increase was over 60%.
Bruce, founder of Raglan Roast, wouldn’t comment on Meek’s rental agreement, but said all valuations were done by a professional valuer.
“It's a commercial matter. Some people don't read them, some interpret them differently, but they are commercial leases and that's the end of the matter.”
As for SWOP, Bruce said the rent was set at below the market value when they started “helping them establish a business”.
During the formal review, “the new price just happened to be a lot more”, he said. A business owner in the town centre, who did not want to be named, said they can’t move anywhere else because of what they called a monopoly on commercial rents.
“This is our life and livelihood, so they know that we are not going to leave and run.
“So they keep increasing the rent and compared to the whole country, the rent here is way too high.”
They said the 60m2 shop was renting for over $55000 for a year - nearly double the same-sized property in Hamilton’s Te Rapa.
“Every two years or whatever the document says, they put up the rent and then they take a management fee as well. Another small business saw more than 90% increase in rent in the last six years.
“My landlord basically says he can do whatever he wants.”
They said the landlord did not provide a valuation report to justify the increase.
“The tenants are kind of scared of going against these landlords because they are mostly family businesses and their livelihood depends on it.
“It's not like a franchise, and you have few others and are not connected to the business, everyone is emotionally connected and physically connected.
“So if they lose it, they basically lose everything and the landlords know it, it’s like a trap.”
Pete Barry, another landlord in Raglan, declined to comment on specific cases but said “an independent valuer conducts the review, and then the tenant has an absolute right to reject it, whereby they then get another independent value”.
Rob Smithers, director and commercial valuation adviser at CBRE Waikato, said rent appraisals were based on market data and was surprised by the latest lease he saw in Raglan “but that was up to the market”.
Raglan rents had increased about 30 to 50% over the last decade. Smithers said it was a supply and demand issue.
While the demand for commercial properties had grown, the supply was very little, he said.