Property: South West Focus

Our focus on the South West takes in the recovery of tourism in the area, the new owners of North Devon's Food Pub of the Year 1999 and their intentions, the 400-year-old Grade II thatched pub in Devon that has been recently refurbished, and we also take a look at soaring pub rents - with the fastest increase seen in the South West...

South West sees tourism recovery​

Ryanair's new air route between London Stansted and Newquay is just the latest evidence that the South West of England is still a favourite getaway destination.

Last year, many parts of the region, particularly Devon, were struck by the foot-and-mouth outbreak, but 2001 also saw the increasing success of the Eden Project, one of the most popular tourist attractions opened in Britain in recent years.

The South West's resilience is reflected in pub property prices. Gary Roberts, associate director at agent Christie & Co's Exeter office, which covers Cornwall, Devon and Somerset, reports "extremely strong market conditions".

"We are at present experiencing an excellent trading period with some notable deals taking place," he said.

"The strength of the market is being fuelled by the buoyant housing market which is enabling first-time pub buyers to make the jump without over-stretching themselves.

"We have seen a marked increase this year in the number of first-time buyers - an important fact in the on-going expansion of our market - and also an increase in the number of buyers from outside our region, which is reminiscent of the late 1980s.

"Buyers are also encouraged by the lowest interest rate for 38 years and there continues to be strong support from the banks.

"Hotspots in the West Country are forming a similar pattern to last year with the outskirts of Dartmoor, North Devon, East Devon, the South Cornish coast and East Somerset the most favoured areas."

Christie & Co's Exeter team, he said, has sold "a substantial number" of freehold pubs for more than £400,000 since January of this year, lifting the average price to nearly £300,000.

Recent freehold sales include the Rising Sun Inn at Umberleigh, the Elephant's Nest near Tavistock, the Atlantic Inn at Porthleven, the North Country Inn and the Muddiford Inn at Barnstaple, the New Inn at Wendron, West Cornwall, the Castle Inn at Axminster and the Royal Oak near Taunton.

The leasehold market is also thriving on the back of the serious lack of freehold sites coming to the marketplace.

"Many free-of-tie country inns are being snapped up by first-time purchasers, many of whom are paying cash of up to £120,000," said Mr Roberts.

Pubcos have also pounced on the region, picking up many properties piecemeal as well as acquiring substantial groups.

Looking ahead, Truro-based agent Scott Burridge Chick believes the air link could be vital to the state of the licensed property market in the region.

"Ryanair says the route is extremely popular and it is likely to add more flights from Stansted and a possible link to Dublin," said the firm's Jeremy Beeching.

"It cannot be understated how important this link could be for the future of Cornwall and on the back of this we are seeing unprecedented interest in leaseholds.

"There is always special interest in any free-of-tie lease because of the beer discounts available, but we are also witnessing demand for fully tied leases operated by companies such as Pubmaster and Unique."

Recent examples of the company's free-of-tie leasehold sales are the Alexandra Inn, Penzance, a 10-year free-of-tie leasesold with a price-tag of £50,000, and the Victory Inn, Falmouth, on similar terms, at £75,000.

Food for bought​

North Devon's Food Pub of the Year 1999, the 13th century Rising Sun at Umberleigh, is in new hands.

The freehold has been sold off an asking price of £395,000 by Christie & Co, on behalf of Charles and Heather Manktelow and Irene Herman, to experienced London publican Malcolm Hogg who will run the pub with his son, Andrew.

The Rising Sun has access to some of the best fishing beats on the River Taw, which is generally accepted as the best sea trout and salmon river in the South West.

Other newcomers from the South East include Pauline and Garry Hope from Essex, who have taken over the Sea Vista Hotel at Mawgan Porth, North Cornwall, from retiring couple David and Margaret Cross.

They intend to create a "pet-friendly establishment", offering facilities for dogs and their walkers. They will also be catering for the ever-growing vegetarian market, providing a varied menu and using fresh local produce as much as possible.

The pub, which has nine letting rooms, was sold through the Stonesmith Partnership off an asking price of £240,000.

Grove up for offer​

Picturesque village pub at the heart of its community, the Grove Inn at Kings Nympton, Devon, is a 400-year-old Grade II listed thatched pub with a lounge bar and 36-cover dining room around an enclosed courtyard.

Retiring owners Alan and Olwen Watkin took the opportunity of a lull in trade during the foot-and-mouth crisis last year to refurbish most of the inn to a high standard.

Good food and theme nights attracts people from far and near, while holiday cottages in the village provide extra custom right through the year.

Region has highest rent increases​

Pub rents across England have soared by 23 per cent over the last five years, according to the latest annual survey from leading licensed property specialist Fleurets.

The figure is way ahead of inflation and partly driven by the explosion of superpubs in city centres. But all parts of the country have shown steady growth and the average rent for a traditional pub is now nearly £40,000 compared to just £7,000 in 1980.

The fastest increase is in the South West of England, where the rise approaches 27 per cent, just ahead of the South East which boasts the highest average rent outside London - £43,000.

In the capital, rent on a traditional free-of-tie pub is now more than £66,000.

Fleurets warns that the true figure for 2001 is likely to rise still further as many rent reviews for the year are still under negotiation, suggesting that tenants are having tough battles with their landlords this time around.

We are entering a crucial period, the agent comments, when "2002 and 2003 are likely to see huge numbers of rent reviews following the hump of new lettings in 1997 and 1998.

"It is vital that rent reviews are correctly agreed. Each acts as a benchmark for others".

For the first time, the Fleurets report is able to look at superpubs separately and shows rents in the City of London to have levelled out at around £140,000 a year while those in the West End continue to rise, in 2001 hitting an average of £166,500. The few recent review settlements suggest that growth is not about to slacken.

In outer London superpub rents continue to increase steadily, up from £79,000 to £92,000 in the last five years and the figures are similar around most of the rest of the country.

Fleurets has also calculated rents as a percentage of turnover. This figure rises to nearly 16 per cent in London's West End, indicating the pressure on the capital's pubs, falling to only eight per cent in the South West.