Alternative use drives town sales
An increasing diversity of prospective buyers are looking to purchase pubs in town centres for potential alternative uses.
That is the view of Pub Innsite, a Royal Institute of Chartered Surveyors regulated property firm headed by Chris Whirledge and specialising in off-market deals with the major pubcos.
He said that town-centre pubs are out of vogue with the City, pubcos and independents, as they face ever-more difficult trading environments.
"It might well be that pubs have a HAUV (higher alternative use value) — potentially worth more money sold as something other than a pub," he said.
Planning restrictions can artificially manage the price of land and buildings by creating supply problems — a shortage of supply in relation to demand will see prices inevitably rise. This means that other sectors may be willing to pay over the odds for sites that are no longer viable as pubs.
Whirledge said: "Until recently, pubs generally reached their highest resale value if change of use to residential was granted.
"This is not the holy grail
it once was, and change of use via the planning system is complex, expensive and time consuming."
He continued: "So if your community no longer desires a local you could sell to a business in a sector where the City is still investing. There could well be an A2 use accountancy firm, or an A1 use retail chain, which would consider a town-centre freehold in a prominent position with good signage and car parking an ideal opportunity."
High-street uses categorisations
High-street uses are classified from A1 to A5
as follows:
A1 Retail outlets
A2 Estate agents, financial institutions, bookies etc
A3 Restaurants and cafés
A4 Drinking establishments (pubs and bars)
A5 Hot food takeaway
As a general rule, pubs and bars can move down the use classes without applying for change of use planning permission. So a pub (A4) can become a restaurant (A3) or shop (A1), but not the other way round. There may also be issues like conservation area restrictions and listed-building consents that prevent a straight forward change of use.
