Motor business under threat from Arches 130% rent hike

Darcars Ltd NW5. From left mechanic Daniel Francois, secretary Marilyn Smith, manager Andrew Rawle,

Staff fear rent hikes will damage Darcars. (L-R) mechanic Daniel Francois, secretary Marilyn Smith, manager Andrew Rawle, mechanic Liam O’Regan, director Mike Smith and mechanic Erno Kiss - Credit: Polly Hancock

The owner and staff of a popular car service centre under the arches in Gospel Oak fear it will be put out of business by a huge rent hike.

Darcars Ltd, a motor service and repair centre which has operated in Highgate Road for more than 45 years, faces a rent increase from landlord The Arch Company.

An initial proposal was for a 200% rise, but even after negotiations rent could rise by well over 100%.

Darcars Ltd NW5. Manager Andrew Rawle and director Mike Smith

Darcars manager Andrew Rawle and director Mike Smith - Credit: Polly Hancock

Darcars owner Mike Smith said: "The rent is just under £30,000 a year and [The Arch Company's] first opening shot was £90,000. We'd be out of work straight away.

"The last go they were at about £60,000. It's double our rent and we're fighting it all the time."

When the business first moved into Highgate Road, rent was set by British Rail, and later by Network Rail. 

In 2019 Network Rail completed the £1.46 billion sale of its commercial property portfolio to The Arch Company, a joint venture between Telereal Trillium and Blackstone Property Partners.

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The Arch Company said it set up an £11 million hardship fund to help its hardest-hit customers in March 2020, and that Darcars was offered a rent-free period.

The company said the market rate points to a valuation of £67k for Darcars' 2020 rent review and the 2021 lease renewal increases it to £70k, but that if agreement cannot be reached, an arbitrator can be appointed.

Mike said: "They ask for a silly amount of money and play hardball.

Darcars Ltd NW5. From left mechanic Daniel Francois, secretary Marilyn Smith, manager Andrew Rawle,

From left mechanic Daniel Francois, secretary Marilyn Smith, manager Andrew Rawle, mechanic Liam O'Regan, director Mike Smith and mechanic Erno Kiss - Credit: Polly Hancock

"We can't put our prices up that amount. We've great clientele who have been here for a long time. We have three generations of families come here, customer's grandchildren come in.

"There are a lot of companies in the arches round here. It's the same for them as it is for us."

The Arch Company spokesperson said: “We want Darcars to stay in the arches, and we are still talking to them about their rent in the hope that they will do so.

“Market rents have increased significantly in Gospel Oak in recent years, in line with the demand in the area, and we are aware that this may be challenging for some local businesses."

They said the company is committed to working flexibly with Darcars "to offer a range of measures, such as reduced or more gradual rent increases, to ensure a solution can be reached”.

Are you a commercial tenant facing rent increases? Email nathalie.raffray@archant.co.uk