Graham Allman
Managing director
GA Select
The domestic property market is always a barometer - though not the driver - for business transfer agents. If we believe what is being quoted in the national press, the domestic market is somewhat of a stall, though domestic estate agents are reporting increases in values - but just how does a down-turn in done deals work? The Royal Institution of Chartered Surveyors' comments that if interest rates rise to 6%, a difficult 2008 would be on the cards for the domestic market.
Why has this happened, and how does it affect the pub-sales market? Without doubt, interest rates are partially to blame with a compounded 30% increase over the last 18 months affecting decision-making in the domestic market; however this type of increase has little affect on businesses as there is usually enough profit in the system to sustain such increases.
General unease and uncertainty within the country is
probably the biggest contributory factor. Having said that, an
unprecedented number of interested people are keen to buy a licensed business and our commercial finance brokers have a large tranche of funds available for purchasing clients.
These are repayable over a 30-year period for freeholds; our training associate Taylor Hall provides us with a unique route to potential new entrants coming into the industry by way of their training course, believed to be "best in class".
Taylor Hall also supports new publicans via a mentoring service which proves very supportive and favourable within finance applications for those new to the industry.
The sellers' market over the last couple of years has become a "fair-deal market", with sales agreed at sensible prices, partially based on turnover and profit multiples. My peers may disagree, but multiples are not the ultimate as to value: it is more of a "a measured want" and opportunity.