THE AGENTS

David Morgan

Managing Director

Cookseys DMP

The market is awash with leasehold public houses.

There - I've said it! No platitudes about it "being a good time to sell", or "we have purchasers coming out of our ears".

The market for leases in general looks like the poop deck of the Titanic - awash! My great concern is accounts that are "a bit out of date". By that I mean only the 2004/05 accounts are made available - but if anything later is required?

The stock answer is: "They are with the accountant".

The missing 18 months or so might hide two things - a

flattening off or fall in sales and a totally unforeseen rise in overhead cost. What profit is historically shown is either

dramatically reduced or can be wiped out altogether. Agents and valuers are in the same sticky position. Both to offer a lease for sale or to value the same property for purchase/bank finance, the existence of the latest accounts is essential.

I carried out two valuations on Monday- one was a potential sale through our Cardiff office and one for a London-based bank mortgage. Neither had 2005/06 accounts and both lessees were looking to cover their original (high) purchase costs arising some three years previously.

Neither will find life easy in a market so full of choice unless the asking price or valuation is totally realistic. Quality - at a price - will always sell.

You can hardly blame some major retail companies for creating new leases from their managed estates at

staggeringly-attractive

premiums that hardly cover the inventory value. Naturally, they want to attract the best tenants in the market, so what better way to ensure high sales generators take their pubs?

The catch-22 in this scenario is that until virtually all the pubcos' new leases are spoken for and even stand-alone

quality leases will have a job to compete - especially on

premium price. The market will stabilize and my guess is that prices will find their own realistic levels.

There is nothing as forlorn as the market rejection of an unrealistically-priced quality lease.