Half of freehold pubs sold for alternative use

Half of all freehold pubs sold by Fleurets in the year to 30 September 2010 were for alternative use, up from 42% on the previous year.

Sale prices ranged from £20,000 to £1m but 58% of those sold for alternative use were less than £200,000, suggesting that bottom end pubco disposals accounted for many of the sales.

In total, 53% of bottom end freehold pubs sold by Fleurets in the period did not stay as pubs.

Overall, Fleurets sold 33% more freehold pubs in the year to 30 September 2010 than in the previous 12 months.

Fleurets director Simon Hall said: "The pub companies are looking at the bottom end of their estate [to sell for alternative use], predominantly urban with wet-led trade, therefore the most unviable to operate as public houses."

Propped up​

Hall said many unviable pubs have been "propped up" by the pubcos due to securitisation before about 2007, which has resulted in a "false impression" of the number of sites that are viable.

He said pubcos want quick sales because the sites are often closed and making no money. "They are under pressure to sell them quickly and are looking for cash deals because banks are unwilling to lend."

Fleurets said the "vast majority" of sales for alternative uses were sold in unconditional deals without a finance facility.

Of those pub that were sold for alternative use, 50% were for residential purposes, with 14% for retail, 13% for restaurants, and 10% for offices.

Two per cent became takeaways and the same proportion became warehouses or doctors/dentists/vets.

Fleurets has not disclosed the number of freehold pubs it sold in total in the year to 30 September.