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Hackney’s flagship brewery Five Points could be latest railway arch firm forced out of borough after 300% rent increase

PUBLISHED: 13:23 26 February 2020 | UPDATED: 16:04 06 March 2020

Director and owner Ed Mason at The Five Points

Director and owner Ed Mason at The Five Points

Archant

Hackney’s flagship brewery could become the latest railway arch business to be forced out of the borough after being hit with a 300 per cent rent increase a week before Christmas.

The Andre Street arches, where traders say they are being forced out. Picture: Sam GelderThe Andre Street arches, where traders say they are being forced out. Picture: Sam Gelder

Five Points Brewing Company, named after the Pembury Circus junction near its home in Institute Place, was launched in 2013 and has gone on to become the borough's biggest brewery.

In 2018 it raised more than £925,000 in a crowdfunder to help it expand and bought the Pembury Tavern pub.

But now it has become the latest business to be faced with having to leave Hackney due to huge rent hikes from The Arch Company, the joint venture between US private equity group Blackstone and property investor Telereal Trillium that bought 4,455 arches from Network Rail in a £1.46billion deal 18 months ago.

Founder Ed Mason said the rent, which hasn't gone up since 2013, is £28,350 a year. In December they received a proposal of £110,000 a year. He told the Gazette: "We were shocked and disappointed.

"It is all the more disappointing because our rent review was due in April, and despite us proactively contacting the landlord to ask for their proposed new rent, it was not until a week before Christmas they approached us.

"The Five Points Brewing Company has been brewing in Hackney for seven years - we have always taken our community obligations seriously and we were the first brewery in the country to become an accredited Living Wage employer.

"We are a Hackney success story, we brewed three million pints in 2019 and now employ over 35 people.

"A rent increase of this magnitude is simply not viable, and unless there is a rapid change of heart on the part of The Arch Company, is likely to force yet another local employer out of the borough."

Wag Smith outside Hackney Flooring, his business of 30 years. Picture: Sam GelderWag Smith outside Hackney Flooring, his business of 30 years. Picture: Sam Gelder

Five Points has hired Savills to negotiate with The Arch Company.

Earlier this month the Gazette revealed the rent increases common under Network Rail were continuing across London with The Arch Company, who had vowed to adopt a "tenant's first" approach and late last year published a Tenants' Charter after pressure from The Guardians of the Arches trade group.

The Gazette has covered the Guardians' campaign since the group was formed in 2017 - click here to see all our coverage.

Other businesses in arches surrounding Hackney Downs station are also being hit with increases, which The Arch Company states are starting points in negotiations.

Murat Yeter, Mustafa Direk and Eftal Kaplan enjoying lunch in Eftal's garage. Picture: Sam GelderMurat Yeter, Mustafa Direk and Eftal Kaplan enjoying lunch in Eftal's garage. Picture: Sam Gelder

Wag Smith has run Hackney Flooring for 30 years, and says his rent demands would see him paying £54,000 - triple the £17,000 he has paid for the last six years.

"It's ridiculous," he said. "I can't afford that."

Garage owners in Andre Street also told the Gazette their rent was going up.

Eftal Kaplan has been in his garage for 30 years and signed a new deal last year. He now pays just under £18,000 a year, up from £12,000, and says he's struggling and plans to close this year.

Chris Gayle in DND Autoelectrics. Picture: Sam GelderChris Gayle in DND Autoelectrics. Picture: Sam Gelder

He said. "I have to stay late, working from 9am to 10pm. I'm going to retire early because of this."

Next door, Mustafa Derek has been told his rent is going up from £11,000 to £15,000 and "feels sick".

Chris Gayle has run DND Auto Electrics for less than four years and is now in negotiations over his rent.

"I was at £11,000 and some change and they moved it to £16,000," he said. "I'm a new business, give me a chance. I think they just want coffee shops and food markets. I don't get it.

"I thought since they had got rid of most of the garages they'd leave a few, you know what I mean?"

An Arch Company spokesperson said: "We conduct rent reviews on a case-by-case basis as part of a clear and transparent process, taking into account a number of factors including appropriate comparables in the area.

"Where long-standing small businesses and not-for-profits have affordability issues, we are working closely with our tenants to agree suitable rents, for example offering stepped rent increases. Negotiations are still ongoing, but we are working closely with our tenants in Hackney to address any affordability issues and agree suitable rents."

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