Cost of leases still on the up

Leasehold pub sale sparks confidence in the market

With property prices continuing to rise all over the country, it comes as no surprise to discover that the cost of leases is also on the up.

Just a few months ago the lease on the Fleece in Tewkesbury was sold for £350,000 which was said to make it one of the most expensive leases bought, but now the lease on the Bell Inn Motel in Codicote has been sold for even more.

The Bell (pictured)​ is in the High Street in Codicote, Hertfordshire, a very affluent village near Welwyn Garden City and St Albans - rumour has it that Codicote is one of the most expensive villages in the country.

The business, which was sold on behalf of the Laurel Pub Company, is a good one. The pub has 25 motel rooms and a 50-cover restaurant as well as a high turnover bar.

There is potential for the construction of more motel rooms although the biggest potential for the pub, as with many village outlets, is in the catering side of the business.

The selling price, which was undisclosed, was "in excess" of the £350,000 asking price.

Andrew Coulter, who handled the sale for property agent Dowling Kerr, said the prices of leases were a sign that the market for leasehold premises is particularly buoyant at the moment.

"The market for leasehold licensed premises is strong, not just for corporates but also within the private sector of the market," he said.

He admitted the sale of the Bell's lease was not an average sale. "It is a rather special business in an exclusive location," he said, "but it is a particularly large leasehold transaction."

Mr Coulter said that although the Bell was a major investment for any buyer, there was a great deal of interest in the expensive lease.

"We managed to find two buyers, both of whom offered the asking price, in a relatively short space of time," he said.

The pub was bought by Linbar London, which also owns the Avalon Hotel in St Albans.

According to Mr Coulter, the sale of the lease on the Bell is a good sign for the future of the licensed property market.

"I am totally confident that the market will continue to be good for the foreseeable future," he said. But he warned that selling a lease is not always easy, despite the market being on the vendor's side.

He said: "The process of selling a leasehold pub is not always straightforward and therefore sellers should prepare well in advance and be armed with up-to-date accounts and a copy of the current lease."