Property

North-west pub market finally back on right path

By David Sutcliffe, Fleurets

- Last updated on GMT

Related tags: Public house, Punch taverns, Enterprise inns

Growth: JDW has acquired Head of Steam in Liverpool (pictured above)
Growth: JDW has acquired Head of Steam in Liverpool (pictured above)
After a period of pub disposals and a weak property market, there are some signs of recovery in the North-west pub property market.

The north-west is a diverse region with a mix of large urban centres such as Manchester and Liverpool, coastal resorts such as Southport and Blackpool, and rural areas such as the Lake District and the Trough of Bowland. This produces a diverse mix of public houses.

For the past five years, the north-west pub market has been dominated by company disposals, particularly from Enterprise Inns and Punch Taverns. While this was a
feature throughout the country, the north-west, together with the north and Midlands, arguably had a disproportionate number of such disposals. Many of these pubs had become uneconomic and Fleurets has identified that approximately 50% of all sales were for alternative use, with most going to cash buyers. In the past six months, we have noticed a decline in the number of these bottom-end pubs coming to the market.

While he south-east has seen a significant level of activity during the past two years, with reported high prices being paid, this has not been felt within the northern regions.

However, we are starting to see a rise in the number of privately owned freeholds coming to the market. There have also been a number of new openings, particularly from managed house operators. Both Marston’s and Greene King have been active in new builds for their family dining concepts, JD Wetherspoon also continues to expand and independents are opening up in areas such as the Northern Quarter in Manchester.

Confidence

We anticipate a general improvement in average values going forward. This is partly a consequence of better properties coming to the market, together with renewed confidence in the sector. Some of the banks are starting to lend again, albeit with stricter loan criteria than has been seen in the past, and this will help fuel private market activity.

With the lack of availability of cheap freeholds, we also anticipate that leasehold pubs will start to become more attractive. While prices may not achieve historic levels, premiums should start to be achieved, particularly for good pubs in good locations, supported by trading accounts.

Related topics: Other operators

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