Drive Thrus: The key to driving up occupancy rates on retail parks?

Whilst the majority of the hospitality sector has suffered under stringent Covid restrictions, one aspect of the hospitality sector has thrived: the drive-thru. Canadian restaurant brand Tim Hortons has this week unveiled plans for a drive-thru restaurant in each UK city.

Enabling customers to stay in their own bubble and reducing the surfaces that customers are required touch, it is no surprise that the drive-thru restaurant has seen a spike in customers during the pandemic.

Tim Hortons are not the only ones to expand their drive-thru provision, with McDonald's advertising that they are looking to open 300 new restaurants and are specifically looking for sites suitable for drive-thru conversions and sites on retail parks.

Landlords of out of town retail parks may wish to jump on the bandwagon by offering vacant retail units to drive-thru providers. Amongst other matters, landlords will need to ensure they have secured the necessary planning permission for the drive-thru use (likely to be sui generis under the revised use clauses order) and to any alterations which are required to the unit (i.e. for an extractor flue). The landlord must also check the terms of any superior lease, to ensure that restaurant / drive-thru use is not prohibited by the superior landlord and may also like to speak to their insurers to determine that cover will continue to be available at a reasonable price.

Landlords will also need to consider the other tenants on the retail park: the impact to those tenants of a drive-thru and the effect that the drive-thru has on the service charge regime. Finally landlords will want to consider whether there is suitable access to the unit from the highway and whether any third party consents are necessary to use such access routes.

Drive-thrus may be another way of diversifying currently underperforming retail parks, but landlords may need to invest in the changes required to the relevant retail unit or offer concessions to the tenant in order that they manage this process.