Branded bars on the decline

High Street development at saturation, says report

The influx of branded bars into the high street could be at an end, according to a recent report on the licensed and leisure retail sector.

The Colliers CRE Midsummer Retail Report suggests saturation point may have been reached on the high street because there has been a much lower take-up of space from bar operators than in previous years.

However, the report also discovered there is still market movement.

Operators with pubs and bars slightly off the high street are attempting to improve their locations and some companies, such as Eldridge Pope, are returning to the market after a period of inactivity.

Large units measuring more than 8,000sq ft are at a premium, according to the report. Brands including Chorion's Tiger Tiger, Regent Inns' Walkabout and Old Monk's Springbok are competing for the prime, larger high street sites.

As the city centres become saturated with branded outlets, the pubcos are beginning to target smaller market towns in a second wave of expansion. But the towns offer far less scope for the creation of "bar quarters" as has happened in large towns and cities, and so there will be fewer deals.

According to the report, the licensed property sector is dominated by two important features. Firstly, the continuing break up of the old brewing companies is still having an effect, and the possibility of licensing reform is also creating an uncertain playing field.

Bass and Whitbread are carrying on with a major rationalisation of their pub estates. Bass sold a 1,000-pub portfolio to Nomura for £625m and Whitbread sold 1,700 leased pubs and 1,300 managed houses to Morgan Grenfell Private Equity which in turn sold 439 to Enterprise Inns. Scottish & Newcastle is also selling a 650-pub portfolio.

Although most of these deals relate to traditional pubs, Wolverhampton & Dudley Breweries is also selling its 34 Pitcher and Piano outlets as part of a 170-strong package of managed and tenanted pubs.

The report claims this development is significant, with the units attracting great interest.

Although licensing reform appears to have been sidelined by the Government, at least for the time being, the uncertainty surrounding the possibility of later opening could mean a blurring of the distinction between bars and nightclubs.

The report claims that despite "gloomy headlines" bemoaning the delay to licensing reform and highlighting failures in the leisure sector, the licensed trade is very healthy.

"The headline-grabbing failures are indicative of the entrepreneurial nature of this sector," the report said.