Manchester pretty
Manchester's pub and bar scene has seen massive regeneration in recent years. Michelle Perrett pays a visit.
Manchester is widely regarded as the hot spot for going out in the North West, although, recent press reports have been less kind to the city - last month people in the city were revealed to be the fattest in Britain. But the explosion of city centre pubs and bars has brought outrage from the local councillors who fear it is becoming an "urban Ibiza".
This is a dramatic change from 1996 when most of the city centre was destroyed by an IRA bomb. The devastation forced the city to rebuild and it now has 856 licensed premises.
Over 120,000 people come in on a weekend bringing £8.26bn in revenue to the city every year. The tram system has also brought in more customers as it can take as little as 15 minutes to get to bars from the suburbs and the huge growth in residential accommodation in the city has meant a demand for venues.
Manchester now has every high street brand including Revolution, Living Room, Loaf, Fat Cat and Waxy O' Connor's and almost everyone who is anyone in the pub trade has some sort of operation there. The main areas for pubs in the city include Deansgate Locks, Peter Street, the city's gay village Canal Street and the Printworks centre.
The Manchester 2002 Commonwealth Games proved a massive success for the city and a boost for licensees. During the games last year many operators snapped up derelict and closed pubs, which still had planning permission and reaped the rewards of the millions of people descending on the city. After the games when they had made a killing many were transferred to alternative use.
Although many say that areas of the city have become saturated there is still a strong market for pub and bar property.
Over the past year the lack of freeholds has meant that people have been fighting to get their hands on a good property. This has meant that while pubs were being sold at a premium many operators were forced to look at taking on a leasehold property in order to get a premises in the city. The result is that agent Christie & Co sold 6.2 per cent more public houses in the city than in 2002. Richard Payne, of Christie & Co's Manchester office, said: "During the whole of 2003 there was a huge lack of freehold properties and people were forced to look at leaseholds. With a dearth of freeholds available on the market - and demand fast outstripping supply - leaseholds have become a popular alternative with buyers.
"The result is that there are not enough freehold or leasehold properties to meet the demand of both private or corporate buyers as is the case in many other areas of the country. At the moment we have three people wanting to buy every leasehold and five for every freehold."
The result is that while a lease usually sells at two-and-a-half times profit some lease premiums have been sold at four times the year's profit.
David Sutcliffe, from agent Fleurets, said that while sites on the main circuit in the city centre continue to trade well many secondary sites off the circuit are struggling. However, while the national operators are off loading these secondary sites many entrepreneurs and regional brewers are looking at them as potential venues.
"I think people are being very particular about sites, although they are willing to pay for the prime sites," he said. "Leaseholds are still selling for a premium but well below the original fit out costs. If you are in the prime pitches you are okay when demand falls off."
Prime locations on the high street could be anything between £15 to £25 per square foot for a ground level site, with some agents reporting rents as high as £135,000 per annum.
However, pub operators and licensees are fighting their rent reviews. "There is more of an inclination from operators to fight their rent reviews and many are looking for break clauses in their leases now," added Mr Sutcliffe. The Northern Quarter of the city is a potential growth area, with the Fat Cat chain one of the first to take on a site for its Bluu concept. But, it's not just the city centre that has been witnessing a period of development. Suburbs such as Hulme and Stalybridge are witnessing a boom.
While the market remains strong there are some signs that Manchester could be about to lose its domination as the hotspot of the North West. Christie & Co is reporting an increase in people looking for pubs in the Liverpool area, Cheshire and the Wirral rather than Manchester. With Liverpool becoming European City of Culture in 2008 licensees are looking to cash in on the increase in business the accolade will bring to the city.
Pictured: Bar operators such as Living Ventures, owner of Living Room (top), and Fat Cat have prime sites in the city.
