What makes Surrey a good place to own a pub?

The region of Surrey is an affluent area that boasts a number of major towns from Guildford, Kingston to Woking. It has some of the highest property prices outside London and is a prime commuter belt.

The Surrey area, which includes 11 districts, has more than 3,000 alcohol premises and club licences. This can include anything from pubs, restaurants, convenience stores and supermarkets to late-night venues (Alcohol and late-night refreshment licensing, England and Wales, 31 March 2018).

According to statistics from the British Beer & Pub Association (BBPA) there are 662 pubs in Surrey that employ 16,385 people.

Surrey is also a densely populated area, meaning good potential trading for pub operators.

UK census data from 2011 reveals there is a population of 1,132,390 (all residents) with 574,526 people in employment in the Surrey area. More than 20% of those are in professional occupations, 15% as managers, directors and senior officials, and 16% in associate professional and technical occupations.

On the market in Surrey

The Donkey Tilford, Surrey​​

Price: £105,000

Tenure: Leasehold

Turnover: circa £550,000 (inc VAT)

Rent: £40,000

Landlord: Admiral Taverns

Wet:dry split: 40:60

Agent: Guy Simmonds 01332 865112

This traditional 19th century pub is situated in the affluent location of Tilford. It features a traditional public bar (20 covers), dining room (20c), conservatory restaurant (30c) and catering kitchen.

 

Park Hatch, Cranleigh, Surrey​​

Guide price: £995,000

Tenure: Freehold

Turnover: Circa £600,000 net of VAT

Wet:dry split: 55:45

Agent: Fleurets 01273 429 500

The Surrey Pub of the Year 2017 is a historic detached Grade II-listed property. It is believed to originally date from the 13th century and was extended in the 16th century. Further 19th and 20th century flat-roof extensions have been added too.

 

The Squirrel, Godalming, Surrey​​

Price: Offers over £125,000

Tenure: Leasehold

Turnover: £507,949 (excl VAT)

Rent: £72,000

Landlord: Wellington Pub Company

Wet:dry:accom split: 40:40:20

Agent: Davey Co 0333 200 8788

This village inn has a refurbished lounge bar, restaurant and conservatory dining areas and eight en-suite letting bedrooms. It is set in two acres and has potential for weddings and events

Good opportunities

It is a region that has a demanding clientele, who want premium service and don’t mind paying for good quality.

Pubs from corporates, breweries, entrepreneurial owners to multiple operators trade in the region and groups such as Red Mist Leisure, Oakman Inns & Taverns, Pearmain, Young’s and Brunning & Price are all buying pubs in the area.

Red Mist Leisure has 10 pubs in the Surrey and Hampshire areas, with seven freeholds and three leaseholds, with its latest opened in Farnham at the beginning of this year. Mark Robson, managing director of Red Mist Leisure says that it is “not too hard” to get hold of freehold pubs in the Surrey area now.

“When I started out in 2004, you could not get a freehold for love or money,” he says.

“There are good opportunities around. I have seen two good Surrey freeholds and while they are not right for us at the moment, I sent them on to colleagues. I bet one of them snaps at least one of them up.”

Robson says that while Surrey is “quite vast” in geographical spread, it is mostly very affluent, which means it is attractive area to trade.

“It is the most affluent place outside of London. It is also densely populated and that is quite key for us,” says Robson.

“If you compare that to an area such as West Sussex, where the population drops quite significantly, that makes rural pubs a bit more of a challenge.”

While Robson admits that pubs in West Sussex are lower priced than those in Surrey, he has always walked away because it would be more difficult to “get people through the door,” he says.

“You are never too far from reasonable sized towns in Surrey whether its Richmond, Guildford or Farnham,” he says.

“There is not too much crime throughout Surrey and it’s a big commuter belt with transport links on road and rail into London and down to the coast.”

Big investments

Fleurets director of agency James Davies says the infrastructure is one reason the local economies in Surrey are so strong. As well as the nearby airports of Heathrow and Gatwick, the region has the best transport links into London.

While the larger town centres and hubs of Guildford and Kingston have been hit by the decline in the high street, good pub operators in the wider area are trading well.

“If you have a good operator who invests heavily in their site, it will trade phenomenally well. If it is average, the competition is too stiff, it will struggle,” he argues.

“In the past few years, Brasserie Bar Co, Young’s, Pearmain, Barons Pub Company and Rare Breed Pub Company have all invested heavily in the local area in a tight geography. They are all trading in great numbers.”

He highlights pub operator Pearmain, which trades in the region, as bucking the trend in casual dining. The pub operator purchased and invested in the Canbury Arms, which was in a residential position on the outskirts of Kingston-upon-Thames.

“The point is they appeal to everyone and the quality of what is on offer is better than you will get in the average casual-dining site,” he argues.

So much money

Operators are also looking further afield than major towns in the region. Young’s recently took on the Bridge in Chertsey, which is a lower-value area for pubs, and according to Davies it is “trading phenomenally well”.

Davis Coffer Lyons executive director Paul Tallentyre agrees that good operators recognise that Surrey is a ‘hot spot’ because it has such a strong economy.

“The good operators are trading at record numbers,” he says. “There is so much money around there.

“If the product is good, people will go to it. People that are buying £1m and £2m houses want good service. It is affluent and people want nice beer, wines, beer gardens, parking and good food.”

He says that while the casual-dining market has been ‘haemorraging’, with town centres such as Guildford suffering, the pub market has been weathering the storm.

“It is positive for the pubs market. It is just that everything is slow at the moment because the market is saturated,” he says.

“A lot of people are sitting on their hands right now and Brexit is playing a massive part in stagnating the market.”

Another issue, he argues, is that while Surrey is an affluent area, landlord rents are too high for operators.

“People are put off by such crazy rents from landlords at the moment. We are seeing a correction in the market on rents and it is only a matter of time before rents come down slightly,” he says.

To find out more about pubs for sale, lease and tenancy visit our property site​.​

Done deals

The Star Inn, Tideswell, Derbyshire​​

Price: £75,000

Tenure: Leasehold

Turnover: £274,045 (inc VAT)

Rent: £25,000

Landlord: Private freeholder

Wet:dry split: 90:10

Agent: Guy Simmonds 01332 865112

Entrepreneurial mother and son team Marilyn Butler and Jonathan O’Connell will continue to run the business but will add their own stamp. They plan to increase the opening hours and introduce entertainment and a new food offer. The pub has a bar (15-plus covers) middle car (10-plus c), lounge (18-plus c) dining room (c17c) and a commercial kitchen.

The Yeaton Cask, Huddesfield, Yorkshire​

Price: Offers in excess of £200,000

Tenure: Freehold

Turnover: £130,000

Wet:dry split: 100:0

Agent: Davey Co 0333 200 8788

This community freehouse has been in the same ownership for approximately eight years consistently achieving net sales in the region of £130,000 per annum (excluding VAT) from 100% wet sales alone. It was sold with potential to add food sales and increase the current limited trading hours.