Legal & General has been accused of “unethical” behaviour as a landlord by the head of the steak restaurant chain Gaucho, as restaurant owners race to expand to match the recovery of dining out.

Martin Williams, chief executive of Gaucho’s owner M Restaurants, said the group had identified 29 potential extra sites to open in the next five years, in a move which would more than double the size of its restaurant estate.

He said the identity of the landlords involved will be closely watched, after a recent clash over a location in Liverpool.

Mr Williams said: “We’ve seen the worst and the best of landlords during the pandemic. We had a situation in Liverpool where we had agreed heads of terms and started a planning application, and both the landlord, which was Legal & General at the time, and the agent, were still marketing the restaurant, which is very unethical in our world.

“That is the type of landlord you’re just not interested in working with. It’s not good for the industry and you just end up with heightened rents.” 

Legal & General ultimately accepted a higher offer from a competitor and paid M Restaurants’ costs.

Mr Williams said his company found another location in Liverpool, which it expects to open this summer, alongside another restaurant in Newcastle. 

Legal & General declined to comment.

Signs of tensions between commercial landlords and tenants are emerging as diners return, with figures from CGA last week showing sales across Britain’s restaurant groups was up 4pc on 2019 levels in January. 

London has been slower to recover owing to its heavier dependence on tourism. This has prompted some chains to expand more into the suburbs, such as high-end bakery Gail’s.

Mr Williams said he would be taking a cautious approach to opening more restaurants in the suburbs, although was looking at some areas such as Alderley Edge in Cheshire. 

“I think your chances of success are less in suburban restaurants than in primary cities or market towns.”

Gaucho previously owned the Cau brand, which had restaurants in more suburban areas, before it collapsed into administration in 2018. M Restaurants bought the chain out of administration but the Cau was permanently closed. 

Mr Williams said restaurant groups had to be “very careful where you set up sites”.

He said: “If someone is in suburbia, and they want to go out for a special meal, they’ll often still come into central London.”