Pub sales down but prices up in 2014

05 December 2014 by
Pub sales down but prices up in 2014

The sale of pubs was down by 28% in the past year, but national sales prices were up, amid a slow-down in sales from the big six pub companies in 2014.

That's according to this year's Survey of Pub Prices from leisure property specialists Fleurets. It found that despite the overall volume of national sales being down, the average combined freehold price was up 15%, and the average leasehold price up by 23%.

The report also found that pub market activity levels had varied considerably between regions, as the economic recovery and availability of finance differed across the UK.

The report considers three kinds of pub within its analysis: The bottom-end freehold, which reflects pubs that are closed, vandalised, under temporary administration, or in a forced sale; the freehold freehouses, which are good-quality pubs and viable businesses; and leaseholds, which can include rent on premium bars, food houses and community locals, as well as free-of-tie deals.

The discrepancy in price movements between the UK regions was particularly evident among the bottom-end freeholds, in which the south coast and East Anglia saw the highest increase in average sales price (29% and 24% respectively), versus a 5-10% increase in the northern regions, and a fairly flat rate in London and the home counties.

The bottom-end freeholds were most affected by the slowdown in activity from the top six tenanted pubcos, most of which are said to have finished their mass sales programmes this year.

In contrast, sale prices for freeholds had gone up by almost 25% to £726, 862 nationally, with the Western region seeing a significant increase in activity and sales volumes. National differences were in evidence here too, as sale prices in the west region were up by over 50%, while the northern market was actually down on sales price by 18%, and volumes by 43%.

Leaseholds saw stronger demand nationally, but conditions were still tough in the north, compared with the south coast and West, where the average sale price was up a significant 72% and 60% respectively (although Fleurets admitted that this had been pushed up by a small number of premium deals, and a lower-than-usual number last year).

The average sale price for leaseholds was £50,783 (up 23%).

The company also predicted that there would be further merger and acquisition activity after the high-profile acquisition of Spirit by giant Greene King, and said that the Chancellor's proposal to allow tied tenants a free-of-tie market rent option would not affect leasehold sale prices over the next 12 months.

The report considers the North to comprise business seen within its Leeds, Manchester and Birmingham offices, and the South to include deals from its London, Brighton, Bristol and Sudbury offices.

Number of pub sales rises 38% in 2013 >>

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