Fears of a property flood are unfounded

The impression that the pub property market is being or is about to become flooded with tenanted pubs is unfounded — as are fears that the rate of pub closures is escalating.

The rate at which tenanted pubs have been placed on the market in recent times — from the likes of Punch Taverns, Admiral Taverns and even through the recent launch on the market of 126 R&L pubs on behalf of the administrator — is not a signal for disposals of tsunami proportions, nor of more pubs being sold for development.

Following its recent strategic review, for instance, it is unlikely, to say the least, that Punch Taverns will place 2,000 of its pubs on the market immediately.

Instead, what we are witnessing, and are likely to witness over the coming months, is a steady stream of good quality pub disposals from a number of operators.

In my experience, and from Christie+Co's evidence during the past year or so, where there are good disposals, a better quality of operator follows.

And far from increasing the rate of attrition, there is a real case for believing that more sold pubs are staying as pubs under new ownership.

In 2010, some 60% of the pubs sold by Christie+Co from the tenanted pubcos churn were bought to remain as pubs.

Quality proposition​

With the quality of proposition that the pubcos are bringing to the marketplace now, not to mention the volume, I would fully expect that percentage to increase.

This means more pubs will be retained in the market, certainly a greater number of a higher quality will remain, and this will hopefully inspire improved quality and service standards across the whole sector.

Add to this the growing freehold-freehouse sector, and the growth strategies embarked upon by the likes of JD Wetherspoon and Greene King, and there's every reason

to feel more confident about the future of pubs and pub businesses in this country.

Furthermore, with the Government's commitment to localism and its incentives to small entrepreneurs or 'business angels', we may even be at an exciting dawn of varied ownership types — creating local competition, increasing quality and delivering much more choice to the consumer.

But before we get carried away, we must remember the elephant in the room that is funding — and while there were emerging signs of growing confidence among lenders last year, it remains an uncomfortable factor.