Simon Hall, director and head of pubs, Fleurets
The average sale prices of bottom-end pubs will increase nationally as better quality properties come to the market, and the pressure on many to sell eases. Transaction volumes will remain high, driven by the major pubcos and assisted by administration/receivership sales and bank pressures to remortgage at higher rates. There is likely to be a significant consolidation in the managed house sector — most obviously, but not exclusively, within the high street bar operators.
Neil Morgan, director and head of pubs, Christie+Co
RBS’s sale of its Galaxy estate to Heineken UK was the deal we had wait-ed for all year, and is almost certainly the signal for the
banks to release further pub assets to the market in 2012, in addition to the ongoing disposals by pubcos. The positive consequences of this will see more growth in the freehouse sector and a greater number of tenants taking the plunge into ownership.
Stephen Taylor, managing director, Guy Simmonds
While uncertainty and volatility will undoubtedly continue for the next few years in the world economic markets, the licensed property market remains alive and kicking. Private treaty sales remain buoyant, albeit in lower volumes than in previous boom years. A profitable business marketed aggressively at the correct price by the agent, in conjunction with a willing seller, will still find a buyer in 2012.
David Gooderham, joint managing director, AG&G
To a good extent, 2012 will mirror the past couple of years. More assets will reach the end of their economic life in use as a pub and will be disposed of to alternative-use buyers. At the opposite end of the spectrum there will continue to be significant investment in larger pub company and brewery- owned managed houses, particularly those outlets focusing on a branded value food offer.
Paul Davey, managing director, DDC Davey Co
Last year, we saw leasehold sale prices ranging from around £50,000 to well in excess of £175,000 for tied and free-of-tie leases whose profitability supported the premiums sought. 2012 will show little change as the factors which influenced the market last year — affordability, return on capital, access to funding — are unlikely to change much in the year ahead.
Robin Mence, managing director, Sidney Phillips
Conditions in the pub property market this year will be very similar to those experienced in 2011. We foresee a continued but slight increase in the number of properties changing hands with further growth in the freehouse and private lease/tenancy sector. Pubco disposals will still be the most dominant factor and will account for a high proportion of pub sales.
Graham Allman, managing director, GA-Select
The appetite for well-trading professionally-run freehold businesses is starting to revive and I would expect this to follow through to the second half of the year, when the banks are predicted to ease up their lending criteria. With pubcos and brewers reassessing their models, along with the loss of poorly performing operators, the leased sector will provide yet again the leading edge of pub business transfers.
Michael Easton, associate director, Jones Lang LaSalle
Non-core assets’ migration to alternative use is a growing statistic as drinking trends continue to change and smaller traditional pubs are less able to support themselves as their customers move on. The licensed sector has seen a resurgence of interest in managed houses with strong results reported from most of the main players. It is expected that this will continue with conversions where possible and new-build sites for some.
Paul Tallentyre, director of pubs, Davis Coffer Lyons
Banks will very much remain in control of the market as we go into 2012; first-time buyers will struggle to get funding but multiple operators with a strong cashflow will continue to snap up sites. Tied leases will continue to present significant issues, although we may start to see the pubcos take a more relaxed view on ties in order to secure investment and good calibre operators, such as Renaissance Pubs, Be@One and Draft House.
Tom Nicholls, managing director, Everard Cole
We feel that more pubco disposals will come to the market in 2012 as the squeeze on household income filters through. We expect further private sales in 2012 as there is a recognition that property values will show only limited growth in our region. We expect a further thinning out of pubs for continued licensed use with developers and alternative-use disposals continuing but slowing from previous years.
Alan Crowest, licensed trade consultant, TW Gaze
East Anglia is well positioned to take advantage of the ‘staycation’ trend with the uncompetitive exchange rates and increases in Air Passenger Duty resulting in more UK-based holidays/breaks. The proximity to London should result in increased opportunities for innovative operators when the Olympics are held. I predict freehold prices will continue to fall but leasehold sales will rise if rents are reasonable.
Matt Bettesworth, director, Bettesworth
I expect to see plenty of transactions at the lower end of the leasehold pub market, although freehold sales will be slower mainly due to lack of available funding. On the brighter side, we always have a steady influx of applicants looking to buy businesses in the South West regardless of the economic situation. Whilst the wider economy is faltering, tourism in the West Country has fared fairly well over the last few years.
Mark Sheehan ,managing director, Coffer Corporate Leisure
We may well see a plethora of managed pub deals in 2012 as the banks finally sell some of the many assets they own. Although debt for bigger deals is harder than ever to obtain, banks are likely to consider selling portfolios with debt stapled. We might also see private equity active. We will continue to see trophy assets sold in London as well as consolidation in the high street bar market.
Mike Phillips, director, Stonesmith
With few indications of any real change in the market, certainly for the early part of 2012, it is likely to be more of the same, with finance for freeholds, or rather the lack of it remains the biggest issue. We expect freeholders will again be looking at creating free-of-tie leases and fortunately this is one area of the market which remains robust.
Howard Day, Howard Day Associates
The market is likely to remain polarised with profitable businesses in the best locations being keenly sought by those established or emerging companies who have capital to invest. In those areas where there are many properties and businesses on the market, demand is unlikely to match supply which will probably keep the bottom end of the market depressed.