Pubs still selling but values are low

The pub property market is trading at least in line with expectations, but realistic prices and hard work from agents are needed to close deals, according to Morning Advertiser​'s poll of experts.

All eight agents questioned for the survey said sales in the first half of 2010 were at least as expected. Two said they had doubled on the same period last year.

Robin Mence, managing director of Sidney Phillips, reported the number of transactions as at least double the same period last year. "I don't see the recession ending in a hurry. There's still plenty of stock on the market, but it will be another nine to 12 months before this impacts positively on values."

Neil Morgan, head of pubs at Christie+Co, said the number of completed deals had steadily risen, with corporate freeholds continuing to attract a lot of interest.

"Leasehold sales continue to be tough, especially in view of the recent availability of several new leases from many of the national operators.

"We are near to the bottom of the prices curve, especially for freehold assets, and with more expected to come to the market later in the year, we expect this part of the market to continue to lead the recovery."

Fleurets director Graeme Bunn said that within the M25 there is "still surprisingly good demand" for pub sites, but outside of central London the market is "still difficult" and needs realistic pricing. "Things are in line with or marginally exceeding expectations. That said, they were very low."

James Grimes of AG&G said the agency had been "working harder than ever" to secure sales. "There is a huge supply of pubs in the south, and there are still people buying them, though a lot are going for alternative use." But he said most pubs valued over £1m were remaining as pubs.

At Guy Simmonds, managing director Stephen Taylor said transactions were up 40% on the same period last year. But he warned that the market was still "very fragile", and that buoyancy was being hampered by banks.

Andrew Watt of Colliers International said sales were "marginally better than anticipated", but couldn't be described as a "bonanza".

Graham Allman, managing director of GA-Select, said sales were "virtually double" what they were in the same period last year: "If it carries on in this upward spiral, I expect sales to reach over 50% the level they were when the market was at its peak in 2007."