Exclusive: more administrations likely

Further administrations are likely in the pub sector as we have only "hit the tip of the iceberg".

That's the warning from Christie+Co head of pubs and restaurants Neil Morgan, talking at the SIBA Conference.

He said people should not be surprised to see quite a few more administrations as banks have been taking a large financial hit with the tough market in the pub trade.

For example, Lloyds took a £600m hit on Admiral Taverns.

Christie+Co predicts that by 2012 the number of tenanted and leased pubs will drop to 22,000 from 30,800 in 2008. Freehouses will rise to 20,000 from 17,700 in 2008 while managed pubs will stay at 9,000.

Morgan said he thinks it is likely that another 6,000 pubs will be sold off and closed in the next two years.

"As we have said on many occasions the economic conditions have actually hastened the demise of pubs already destined for closure.

"We are seeing a better quality of tenanted stock coming onto the market and, according to our own evidence, pub sales are up 15% compared to last year.

"Our own statistics show pub prices have declined by 29% since the peak of the market in July 2007. We believe we are at the bottom of the curve at this time."

He said 60% of pubs Christie+Co is selling are remaining as pubs, with 75% of people who are buying living within a 10-mile radius.

The managed house sector, he said, will continue to drive the market, with the lack of supply likely to drive values up.

While the "revolving door tenant" remains an issue, pubcos need to ensure they are finding good-quality licensees to fill their vacant pubs.