Pub property prices plummet 20%

By Gemma McKenna

- Last updated on GMT

Related tags Public house Late night

Pub prices fell last year
Pub prices fell last year
Pub property values plummeted 20% in 2009, compared to 11.6% in 2008 — that's according to Christie + Co.

Pub property values plummeted 20% in 2009, compared to 11.6% in 2008 — that's according to Christie + Co's latest Business Outlook publication.

The property agent says average pub values have declined by 29% from their peak in the fourth quarter of 2007.

Head of pubs Neil Morgan said: "On a transactional level, deal activity increased in 2009, compared to the previous year, although volumes were nowhere near pre-credit crunch levels.

"Prospective buyers continues to find it hard to raise finance, while others continues to play a waiting game, to see when values would bottom out."

The report showed regional brewers and multiple operators continued to take advantage of the market to buy freeholds, especially in the first half of the year. The firm expects these operators to continue to expand, and to "come out  of the recession well-placed to continue their growth over the next 12 months."

Morgan said: "In the latter half of the year, we could see the return of some national chains to the acquisition trail."

He suggested Marston's or Greene King will return as buyers.


When it comes to freehouse pubs, the firm predicts the total number of freehouses will grow in 2010, as national chains, including Punch Enterprise and Admiral, continue with disposals.

Morgan added: "This will contribute to a drop in tenanted house numbers over the next 12 months, while the managed house sector will remain fairly constant.

"Although 2010 is unlikely to see any significant sector consolidation, the number of debt-for-equity swap deals that have taken place over the last 18months could lead to a number of banks exploring exit strategies in two to three years time."

Late night venues

The late night sector is set for another "tough 12 months" which will see further pre-packs and administrations, according to Jon Patrick, head of leisure.

Describing last year's trading as heavily influenced by slowdown in consumer spending and a rise in youth unemployment, Patrick said: "The industry continued to suffer a hangover from the "me too" years, where operators continued to flood the high street in order to capture a slot on the drinking circuit — at almost any price.

"High street rental levels based on floor areas, or over ambitious sale and leaseback deals, have proved inflexible and left many retailers struggling to move their business forward."

But he added: "The reality is that the sector is set for another tough 12 months, with more pre-packs and administrations inevitable, as the banks continue to reappraise and reposition their exposure to what is recognised as a high-risk, high-reward market."


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