Pub-to-restaurant refurbs on the rise

Licensees could be reaping the rewards if they sell their pub to a private restaurant operator.

James Posner, of agent Fleurets, says that increasing numbers of restaurateurs are keen to get their hands on pub sites.

These restaurant operators are also flexible about the type of site they are willing to buy and will consider anything from a traditional bottom-end pub they can refurbish to a rural pub restaurant.

The result is that they are willing to pay a premium for a suitable site, Mr Posner claims.

"Pubs offer everything that a restaurateur is looking for with a large ground floor trading area, sometimes a car park, a good location and a trade kitchen," he said.

"Pub operators will have a maximum price they can pay for a pub based on its turnover but restaurateurs can generally pay more as they will be able to increase turnover from food."

"Quite a lot are back-end boozers and as pubs some of the sites were doing nothing. If a pub trades at £5,000 a week as a wet-led operation a restaurateur can come in and boost it to £15,000 a week."

Colin Wellstead, director at Christie & Co, said: "A lot of corporate restaurant operators are looking at high street pubs while the private restaurant operators are more likely to go for rural areas which are becoming destination restaurants.

"There are a number of pubs being converted to ethnic restaurants."

But time is running out for operators as government plans to change the use classes order could end this market. Under the current system a property classed as A3 is allowed to sell food and drink for consumption on the premises.

At the moment a licensee or pub company has the flexibility to change the use of their premises from a bar to a restaurant without seeking additional planning permission.

But under the proposed new system, which is expected to become law next year, the existing A3 category could be split between restaurants and pubs. This means that an operator would not be able to change the use of a site without planning permission.

"This going to have an impact. A lot of people are trying to snap up sites now," said Mr Posner.

Trevor Watson, director of special projects at agent Davis Coffer Lyons, said: "The proposals will restrict flexibility. It prevents operators responding to competitive pressures and consumer demands by changing the nature of their food and drink offer."

One of the converted​

The White Horse (pictured top)​ in Cheshunt, near Waltham Cross, Hertfordshire, was sold to Mr CV Hang from Harlow, Essex, who is going to convert the property into a restaurant.

Part of the pub is listed and the property has a lounge bar, games bar, three-bedroom owner's accommodation, car park and beer garden with a children's play area.

Stewart Harkness of Christie & Co said: "Licensed premises in the northern Home Counties are very popular, especially with restaurateurs from the London area looking to move away from the capital."

Christie & Co sought £89,000 for the remaining 18 years of the current 20-year lease.

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