Property deals and hindsight

2005 and 2006 were heady years for pub deals. A number of companies - Punch Taverns, Enterprise Inns, Greene King, to name three - were going through the market like a dose of salts, buying assets for not insignificant sums.

With such deals came the 'afters', with relative newcomers to the industry buying up the bits the Big Boys didn't want, like when Punch sold the half of Avebury Taverns it found surplus to requirements to the then-burgeoning Admiral Taverns, or when Pubfolio acquired more than 500 pubs from Punch for £162m. The banks were happy to lend, backed - they presumably assumed - by the onwards and upwards nature of property prices. Hindsight is a wonderful thing, isn't it?

A history of the industry throughout these boom years, when sellers seemed to be able to name their price for assets, will doubtless make for a fascinating read. Not everyone has had their fingers burned, but there is no escaping the fact that some - perhaps many - of the current traumas have roots in those more profligate times.

Banks once fell over themselves to lend; now they've hung the equivalent of the 'No hawkers, no unsolicited callers' sign on the door.

Tightening finances, together with downward pressure on revenues and valuations, make for an unpleasant mix, as Pubfolio and others have found. More to come? Probably, sadly.

Can any lessons be learned from what has been going on in the banking and pub worlds, since in many cases at the moment the latter seems inextricably - and somewhat bitterly - linked to the former?

As I mentioned, hindsight is a wonderful asset to have at one's disposal, but that said, the salutatory outcome from the recent upheavals is… prudence?

As everyone is being told by the government to be mindful of their finances, it would be a good place for the pub and property development sectors to start…