UK pub sector predicted to recover from slowdown

30 November 2012 by
UK pub sector predicted to recover from slowdown

The UK pub sector is likely to recover from a recent slowdown and see major deals taking place in 2013, a report has predicted.

The group predicted that 2013 will see a "steady stream" of distressed properties coming on to the market after transactional activity slowed down in the past 12 months. Fleurets said that there are "rumours of larger deals in the offing and these are likely to surface in 2013".

The report added that in the current economic climate a key driver to achievable price and required marketing period, is the availability of funding to prospective purchasers.

"The likely category of purchaser is of prime importance. The established corporate operators continue to have readily available funds. Contrary to this, privately owned companies and individuals are presently less able to secure financial backing," it said.

Fleurets warned that a number of traditional lenders have become increasingly cautious of the sector and are reluctant to support new ventures or customers. It added that leaseholds held on "rack rental" terms - high or extortionate levels - "have experienced very significant declines in value and are now considered by many lenders to be unacceptable security for loans".

"Whilst freehold properties continue to be traded in mixed market conditions, many transactions relate to distressed assets where sales may be adversely affected by the absence of trading information, operation under temporary management or restricted timescales.

"Prospective vendors not obliged to sell, are more inclined to put off sale decisions and await better market conditions. As demonstrated by the market over the last three years, we anticipate a steady stream of distressed sale properties coming to the market in 2012/2013."

Fleurets said it expects to report its 2011/2012 price survey shortly but predicted that the pub cos have been selling higher value units than before, especially in the South East while the volume of sales have been declining in the North of England.

Landlords could force more rent reviews on pubs and restaurants >>

By Kerstin KÁ¼hn

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