The pub sector continues to show positive signs of recovery, with 34% of buyers new to the sector, says specialist property adviser Christie + Co.
Renewed interest in the trade has been created through the rise in the residential housing market and general signs of economic recovery, with many buyers relocating from London and the surrounding boroughs looking for change of lifestyle opportunities.
Interestingly, in 2013, 67% of pubs sold in the UK retained their existing use as licensed premises — up 5% from the previous year.
Sophia Sangchi, licensed agent for Christie + Co comments: “Many buyers are spotting the opportunity to turn what might have once been a poor performing pub in need of capital expenditure and investing in it to develop their own ideas, with a particularly noticeable rise in the gastro pub concept. These pubs tend to offer a selection of good quality food, with locally sources ingredients and a trained head chef.”
“A good example of this is the former Try Again pub in Bristol. When we launched this to market, the pub was wet let and had very limited turnover. It was offered to market as part of a larger corporate disposal programme. A local purchaser spotted the opportunity and transformed the unit into profitable business known as The Ashville (pictured top), offering good quality food, local ales and B&B accommodation.”
This improvement supports the statistic from a 2013 Mintel report which suggests that due to the improvement in quality of pub food, pubs are the first choice when eating out for 57% of consumers.
In addition to food, the South West has also seen a rise in the number of pubs offering locally brewed craft beers, which has come following a rise in the number of microbreweries.
A recent pub market report from the Morning Advertiser suggests that the key change publicans anticipate introducing over the next 12 months is organising festivals and events around cask beer, with 52% of publicans asked voting this as their key change.
Christie + Co are hearing further signs of encouragement from existing publicans as 50% report a rise in turnover over the last 12 months, triggered by a rise in consumer spending. Buyers are seeing this rise in trade as an excellent opportunity to enter the pub market or expand their portfolio of sites, making the most of low interest rates currently being offered by lenders.
The leasehold market remains particularly price-sensitive with buyers on the lookout for good opportunities. Christie + Co recently sold the Queen Adelaide in Blagdon. The pub was brought to the market on a free-of-tie basis, attracting plenty of interest and resulting in a deal agreed to an overseas buyer looking to return to England for a change of lifestyle opportunity.
Whilst free-of tie-leases generally attract more interest, Christie + Co recently launched a tied lease on a confidential basis in South Bristol. The business is located in a popular area and trades exceptionally well, triggering a lot of positive interest with an offer already received.
Pub director for the South West, Nicholas Calfe comments: “Demand for freehold opportunities continues to grow with buyers keen on assets with strong trading figures and/or in desirable locations such as Bath, Bristol or Cheltenham. A good example of this is our recent marketing of The Parrot in Cheltenham. The pub is currently closed, but due to its strong location, a deal was agreed within six weeks of marketing.”
Overall the pub market continues to go from strength to strength. A recent Pub Market report from the Morning Advertiser suggests that 48% of publicans interviewed predict a rise in turnover in the next 12 months. This has had a knock on effect in pub sales with Christie + Co noticing a surge of applicants looking for pub opportunities, which has in turn sparked an overall rise of 9% in pub sales in the South West