Law firm's figures show slowing pub property values

Property values in the pub trade are performing badly against other companies in the leisure sector, say law experts Halliwell Landau.

Pubs and breweries have seen rental costs drop by 0.7 per cent in the last 12 months compared to other leisure companies who have witnessed a 15 per cent rise. That's according to its new report which analysed the property portfolios of a 35 FTSE-listed leisure and entertainment companies.

Freehold properties have also performed badly in the pub sector compared to other leisure companies.

The leisure sector as a whole saw an average growth of 41.1 per cent in the value of companies' freehold and long lease assets between 2001 and 2002 but pubs saw a disappointing increase of only nine per cent.

Simon Hardwick, head of Halliwell Landau's property team, said: "Falling rentals reflect the simple economics of supply and demand. Pubs and breweries are suffering at the moment and coming under pressure from shareholders. Rentals have dropped because the market has hit a downturn."

But some of Halliwell Landau's figures are in complete contrast to those of property agents in the sector. In its annual Business Review and Outlook report 2002 Christie & Co has revealed that rents in pubs and clubs have risen by as much as 37 per cent over the past five years, with some rising by 100 per cent over the last 12 to 18 months.

However both Christie & Co and Fleurets have predicted that pub companies will continue to witness problems with the high street lease market. The rapid growth of outlets on the high street has lead to over-saturation in some major cities and it is predicted that there will be further casualties.

Halliwell Landau results​

Net average freehold and long leasehold:

Year-on-year change in rents: