UCLH-1051 - 250 Euston Road Catering Concession Contract Project Ref:

This notice is to inform the marketplace that UCLH plan to extend the current contract for the staff cafe provision at its HQ site, 250 Euston Road, London, NW1 2PG from April 1st 2022 to end 31st March 2024.

This is beyond the original permitted extensions allowable under the terms of the current contract arrangements.

Further information relating to the contract:

The incumbent, Perfect Touch Enterprise Ltd (trading as 'L'Express') (the "Incumbent") was awarded a 3 year contract in 2015 with 2 x12 month extension options under the Concession Contracts Regulations.

The current contractual arrangement was due for renewal on 1st April 2021 and a tender process commenced in January 2020 with a new contract planned to commence 1st April 2021.

However, due to the impact of covid 19 pandemic UCLH suspended normal procurement activities to concentrate on supporting the covid 19 response. The retender process was put on hold for 12 months and the Incumbent's contract extended for the period 1st April 2021 to 31st March 2022 to allow for the tender process to recommence in January 2021.

The Current Position:

Due to two national lockdowns and ongoing social distancing rules during the pandemic, the current footfall at the 250 Euston Road site has significantly reduced, with the majority of the admin and clerical workforce remaining working from home. This is supported by the senior management at UCLH and will continue in to the immediate future.

UCLH have the right to terminate the lease at 250 Euston Road at the end March 2024. It is unlikely that this will be the case; however, this is yet to be decided.

Within any tender process UCLH would need to ensure that the right to bring all service provision contracts at the 250 Euston Road site to an end at this date is retained, should UCLH break the 250 Euston Road lease.

The current position of the retail food sector has been also been considered and a number of operators within the sector have been consulted. The opinions of these operators was such that currently they would not be interested in tendering for an opportunity such as this, due to: the lack of footfall at the 250 Euston Road site; the lack of return on investment considering the limited contract term in relation to the lease arrangements at 250 Euston Road; and the current uncertainty surrounding the retail food sector.

Commercial information:

The Incumbent's turnover for 2020 was £413,015/pa compared to £712,845/pa for 2019.

The Incumbent is charged a flat fee of £71,747 annually (£5,979 per month) for the lease at 250 Euston Road.

Therefore UCLH will be awarding a further extension to the Incumbent to continue providing the café service provision for the period 1st April 2022 to 31st March 2024.

It is envisaged that a new tender process will commence in the Spring of 2023 and be advertised in accordance with the prevailing regulations at that time. By this time it is expected that the retail food sector and footfall at the 250 Euston Road will have returned to normal levels, and a decision to exit or remain at the site will have been reached.

During this period UCLH will conduct annual reviews to reassess the market position, understand the decision to continue with the building lease and have a better understanding of footfall at 250 Euston Road.

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