Pub rents fall as a proportion of turnover

By Rob Willock

- Last updated on GMT

Related tags Renting London

Latest figures show rents have risen but represent a lower percentage of projected turnover
Latest figures show rents have risen but represent a lower percentage of projected turnover
Average dry rents on new pub leases from the four largest tenanted pub companies are up sharply this year, but have fallen as a proportion of projected turnover, as the market stages a steady recovery.

Latest figures from the Royal Institute of Chartered Surveyors (RICS) – on new pub lets from Enterprise, Punch, Marston’s and Star Pub & Bars – show average rents rose by 12% from £24,368 to £27,255 from Q2 2013 to Q2 2014. However, average projected pub turnover figures are up 15% year-on-year from £296,103 to £339,477, meaning that rent as a percentage of projected turnover is down from 8.2% to 8.0%.

Regionally, this figure ranges from 9.4% in the South East and 9.0% in London to 6.4% in Wales.

Average projected turnover figures on new lets ranged from £430,921 in London to £294,411 in Wales. London also saw a much higher average length of lease in Q2 2014 – at 14 years – compared to a national average of 7 years, and 5 years in the north of England.

The total number of new pub leases from the four pub companies in the last quarter was 226, down from 308 in the same period last year. Some 55% of these were let on a full tie (up marginally on 53% in Q2 2013) and 42% on a part-tie. The remaining 3% were free-of-tie.

RICS produces its quarterly report on pub lettings activity across England and Wales using aggregated and anonymised records of actual lettings completed, which includes new letting transactions and some lease renewals, but not rent reviews. The data is taken directly from the business plans and accounts of willing lessees.

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