RICS Pub Benchmarking survey

RICS: Average new lease rent up 3% year-on-year

By Oli Gross contact

- Last updated on GMT

RICS: Average new lease rent up 3% year-on-year

Related tags: Renting, Leasing, London

The average rent on a new lease was £29,253 in the fourth quarter (Q4) of 2015, up by more than 3% year-on-year, according to the latest figures from the Royal Institute of Chartered Surveyors’ Pub Benchmarking Survey.

The figures may ring alarm bells for hosts gearing up for the costs of the new National Living Wage, coming into force in April.

However average projected turnover over the next two years was £340,982 in Q4 2015, up from £322,573 in Q4 the previous year​. Therefore in the last quarter of 2015 rent as percentage of projected turnover dropped 0.2% in comparison to 2014 — from 8.6% to 8.4%.

The survey also found that half of the 248 new leases in Q4 2015 were fully tied, and the average wet share of turnover stayed steady at 73%, with 24% dry and 3% other.

London

London continues to buck the trend on average lease length, up at 18 years compared to the national average of seven, and up from 14 in the capital in the Q4 2014.

The average rent in London stood at £61,000, compared to the Midlands at £19,202, where the price dropped by £5,000 Q4 2014. London also has by far the highest rent as a percentage of turnover, at 14.4%.

London also has by far the highest rent as percentage of turnover, at 14.4% compared to 13.1% in the capital in Q4 2014.

Growth

After a massive 128 new leases in Q3 2015, the North East slowed its growth, down to 58 new leases in Q4.

But it’s still the region with the biggest expansion, topping the second highest new leases seen in the midlands at 55.

A big mover for average projected turnovers for the next two years was in East Anglia, up from £319,255 in Q4 2014 to £416,913 in Q4 2015.

The RICS data is based on figures supplied by Enterprise, Punch, Marston’s and Star Pubs & Bars.

It was recommended by the Parliamentary Business, Innovation and Skills Select Committee to improve pub rental transparency.

Related topics: Other operators

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