Christie gives positive forecast for 2008
Christie + Co have made a largely positive forecast for the property market in 2008 - despite widespread uncertainty in the financial markets and difficult trading conditions.
Speaking at the company's annual business outlook event, Neil Morgan, head of pubs, said that licensed property market was holding up well, with average pub values rising by 6.5% last year.
The figure is a less dramatic increase than 2006, when average prices were 8.5% higher than in 2005, but Christie + Co maintains that values are still moving in the right direction.
Morgan said that leasehold premiums would return to normal levels next year, after the market was slightly diluted by 637 ex-spirit sites coming onto the market.
He said: "There's roughly 17,300 freehold and free-of-tie sites, and pubcos are buying up about 5% of these a year. Increasingly the only option will be to take a leased pub."
The company reported a slight dip in leasehold assignments in 2007 - mainly due to a big supply caused by 600+ ex-Sprit sites coming onto the market.
But it expects the volume of assignments to return to 2005 and 2006 levels over 2008.
Morgan also talked about a positive change in pubcos attitudes towards tenants. He said: "In these tough trading conditions pubcos will re-evaluate their relationships with lower end tenants. Tenants are the life blood of these companies and they know that."
But Morgan said that it was inevitable that thousands of "inviable" sites would close their doors for good due to the numerous pressures on the industry, particularly the smoking ban and downturn in consumer spending.
He said: "It is certainly true that large numbers of pubs have closed and will continue to close - but many of these closures are simple due to changing demographics, social trends and the strong appetite for pub sites from developers.
"The smoking ban is certainly a factor but in a lot of cases it has just sped up the inevitable."
