Old Town traders feel pinch over 88% rent rise

Kerr McIntosh is considering moving away from the Canongate in the face of rising rents
Kerr McIntosh is considering moving away from the Canongate in the face of rising rents
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KERR McIntosh has heard a few bum notes in his life.

Settling down in front of one of his many pianos, he tinkles the ivories, doing what his family has done for more than 40 years in their Canongate shop.

Hilary Thacker isn't confident about the future

Hilary Thacker isn't confident about the future

But unlike in 1967, when his father Bill first opened the business – known then as Edinburgh Organ Studio, but recently renamed Key Player – things are far from harmonious.

In fact, when it comes to bum notes, he thinks the city council is making something of a racket.

Kerr, 32, recently received a letter from the local authority stating that rent on the property would be increasing by a staggering 88 per cent – a decision he feels could signal the end for his shop in its Old Town location.

Further up the road, several businesses on the Royal Mile have been hit by similar hikes, sparking fears the famous street could become flooded with even more “tartan tat” shops if the affected businesses are forced to close or relocate.

Giancarlo Disotto believes his Fudge House will survive

Giancarlo Disotto believes his Fudge House will survive

“The council has said it wants to improve the Royal Mile but we are a good, quality independent business – we are not tartan tat – and look how much the council is trying to put us out,” sighs Kerr. “It’s quite sickening.”

However, the local authority insists it is obliged to “achieve best value” for the 46 retail properties it owns on the street, underlining it is not prepared to “over-subsidise tenancy agreements”.

Today, Royal Mile businesses can have their say on the rent increases, and any other related issues, when they meet with council staff to discuss the street’s future.

It is likely Kerr will have a lot to say, branding the increase in rent “shocking”, “scandalous” and “short-sighted”.

Paul Clark is thinking about a move

Paul Clark is thinking about a move

“So far, we have negotiated the 88 per cent down to 55 per cent, but the council said it won’t go below that,” he says. “Normally the rise in our rent is around ten to 15 per cent.

“We have been on the Royal Mile for more than 40 years and I don’t want to leave but I’m looking at whether it’s worthwhile staying here or whether we need to find another location.

“I think there will be more empty shops and “to let” signs in the next few years, and businesses like us will have moved.

“The country is in recession and it just beggars belief that the council would increase our rent by that amount.

“I think the council is a bit deluded because the Canongate isn’t prime retail space; it gets nowhere near the same kind of footfall that you get in the upper parts of the Royal Mile. The council is trying to charge us the going rate for the High Street, which is not anywhere near comparable.”

Two independent traders on the Mile have recently closed their doors and several others are understood to be considering shutting up shop after the increases were imposed.

Bagpipes Galore, which has been on the Canongate for 18 years, has moved away from the street after owner Ralph Hepburn was told by the council his rent was to rise from £8000 a year to £13,500.

Scottish Soap Works, which was hit with a 25 per cent rent increase, has also left the Canongate after eight years.

Although the stores are relocating to other parts of the city, the news sparked criticism of the council, which has set up a new strategy for the Royal Mile that aims to encourage more independent firms to set up on the street instead of more tourist souvenir shops.

Kiltmaker Geoffrey Nicholsby, 65, who owns five leased properties on the Royal Mile, believes the council was wrong to impose large rent increases during the economic gloom.

He says: “I think the council are in another world if they think they can push the rents up just now in this situation.

“It’s a terrible state when you walk down the Royal Mile and see what’s going on, we need to go back to having a bigger choice of quality shops.”

One trader who has been left fearing for her livelihood is Hilary Thacker, who runs Hilary’s Bazaar, a corner shop in the Canongate.

She received a letter from the council stating her rent was to increase by almost 40 per cent.

In the basement of the Arabic shop, the 50-year-old from the New Town runs classical Egyptian belly-dancing classes.

It has been her life-long dream to set up this kind of shop on the Royal Mile, but just two years into making her dream a reality, Hilary fears the rise in rent could be the final straw for her business.

Hilary says: “I can’t survive as I am – I can’t afford to put the heating on – so to pay the extra rent, I’m going to have to borrow money.

“I think eventually the Royal Mile will be so ruined by tartan tat shops we will lose out on tourism.”

A few doors along the Canongate, The Fudge House of Edinburgh, set up in 1949, has also been affected by a rent increase. However, partner in the business Giancarlo Disotto, 33, says he is hopeful it will survive.

One of his neighbours, Paul Clark, 54, partner in The Carson Clark Gallery, has also been hit by soaring rent.

“For a lot of businesses this may well be the final straw,” he comments. “This end of the Royal Mile is deathly quiet and there are not the quality shops to attract quality shoppers.

“Maybe it’s time to move.”

Meanwhile, Ruth McKay, chairwoman of the Edinburgh branch of the Federation of Small Businesses, urges the council to do more to help small, independent businesses.

“Our initial reaction to the rent increases was that we were genuinely confused,” she says. “The council has been saying their retail policy is to encourage small, independent businesses, but these rent increases completely contradict this. While we accept there will be a rent increase, I think the council needs to balance that with offering some support and advice for businesses.”

Councillor Tom Buchanan, the city’s economic development leader, adds: “The council is keen to encourage a large mix of occupiers in the Old Town and currently there are over 100 independent businesses occupying council-owned properties in this location.

“It does, however, recognise how difficult it is to balance proportionate market rents with a diverse and interesting retail experience, while at the same time having a duty of care to the ratepayers in ensuring that it does not over-subsidise tenancy agreements.”

Who owns it?

LIBERTON-based property developers Alex Forall and Maria Gallo and Glasgow businesswomen Shirley and Delia Berkley, stand out among dozens of smaller property owners who dominate large parts of the Royal Mile, each owning at least three properties worth around £1 million or more.

The property owned by the city council accounts for more than one in three commercial premises – 46 out of 129 – with an estimated value of £43m.

The local authority owns 28 per cent of the commercial properties outright, and has an indirect share in several more held by council-owned company Edinburgh Retail and council joint venture firm Buredi.

It benefits from rents on a string of businesses, among them tourist gift shops run by the Gold Brothers, Clarinda’s cafe, and the Old Children’s Bookshelf.

The local authority has two retail units on Lawnmarket, 20 on the High Street and 24 on Canongate.

The list of owners also includes the billionaire Pears family, based in Hampstead, London, who own the PDSA charity shop and former Golden Gift shop.