The Music Venue Trust (MVT) said it has launched a Charitable Community Benefit Society (CCBS), called Music Venue Properties (MVP), to purchase the freehold of grassroots music venue properties.
It said that unlike a charity, a CCBS can raise money via community shares and by purchasing these shares music fans and ethical investors will help raise funds to allow MVP to buy freeholds, while also receiving a 3% APR return on their investment.
According to MVT, more than 35% of grassroots music venues have closed in the last 20 years and 93% of them are tenants with the typical operator only having 18 months left on their tenancy.
The grassroots music venue sector has amassed more than £90m of additional debt since the pandemic started, with 67% of Culture Recovery Fund grant aid having been paid directly to landlords, according to MVT.
The MVP scheme will commence with the aim of raising £3.5m to purchase the freeholds of six venues in England, one in Scotland and two in Wales. The first community share offer launched today, 23 May, with a view of buying the venues before the end of the year.
MVT said further venue freeholds will then be identified and secured as and when they become available, and MVP will continue to raise funds through selling community shares and borrowing against the freeholds purchased. All rental income subsequently received from the purchase of venues will be reinvested towards the expansion of the portfolio.
On completion of purchase MVP will offer the majority of current operators an immediate rent reduction and help contribute to building repairs and insurance, while also guaranteeing long term security and market resistant rents.
MVT CEO Mark Dayvd (pictured) said it is the most ambitious initiative the Trust has undertaken: “The long-term security and prosperity of grassroots music venues depends almost entirely on one thing – ownership. Too many have been at the mercy of some commercial landlords whose motivations revolve primarily around profit. We have lost over a third of our venues in the last 20 years and with over 90% having only 18 months left on their tenancies we are at the cliff edge and could see the decimation of our sector if we don’t do something radical about it.
“The Music Venue Properties scheme will allow ethical investors and music fans to invest in the future of live music while receiving a healthy return on their money. Our #SaveOurVenues campaign launched during the pandemic raised over £4.1m with more than 80,000 people contributing. We already have the crowd – we just need to ask them to invest from May 23rd and are confident they will.”