Average pub sale price rises 3.3% in 2013

15 January 2014 by
Average pub sale price rises 3.3% in 2013

The average sale price for pubs rose 3.3% in 2013, and a record number were sold for ongoing use.

That's one of the findings in property agency Christie + Co's Business Outlook 2014.

It said that estate churn had slowed as pubcos reached a point of satisfaction with their estates, having disposed of the majority of their bottom-end estates.

However, Christie + Co director and head of pubs, Neil Morgan, sounded a note of caution.

"While trading performance seemed to improve in general terms, the better results were geographically predicated. London remained in its own bubble, trading-wise, and also saw most of the higher premiums paid for pubs. Elsewhere, the UK regions rather reflected the 'recession-recovery effect' - the belief that recession starts in the north and recovery in the south was certainly mirrored in the trading performance of pub companies," he said.

Experienced operators, returning entrepreneurs and first-time, lifestyle, buyers all flocked to acquire higher quality pubs during the year, while smaller operators picked off individual, regional sites to add to their estates. There was also a real appetite for pubs from tenanted lease estates, according to Christie + Co, which it said reflected the quality of pubs on the market.

Tenanted pub disposals generally declined to "sensible" levels as the pubcos sought to improve the tenant relationship.

Morgan added: "The beer tie is going through a natural evolution, and the pubcos understand there is more to be gained by managing the tenant relationship better and encouraging new tenants into the sector."

Distress disposals continued to be something of a way of life in the pubs sector. In late 2013, Christie + Co was instructed by administrators to sell the remaining sites in the Bramwell Pub Company estate, after Stonegate had acquired over 70 sites.

Morgan said: "We should not expect Bramwell to be the last word in distress. As we moved towards the close of 2013, the banks announced their intentions to dispose of billions of pounds worth of non-performing loans, signalling a lessening of their exposure to bad property loans - including some, inevitably, in the pub sector.

"2013 sent a strong signal that the pub sector is picking up, both in the trading performance of single units and companies, and in the values being achieved by pubs that are being placed on the market - even those that are in distress.

"As we move into 2014, this state of affairs will alert, and offer encouragement to, those who are looking to either add to their estates, or seeking a return or first-footing in a sector which is looking to grow ever-more-vibrant and stable."

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