Optimism grows in pub markets

We are seeing a buoyant market in public houses, especially those with a strong mix of trade. Fresh off the back of notable freehold sales, including the Riverside Inn, in Bovey Tracey, Devon, sold off an asking price of £750,000, and Cockhaven Manor, in Bishopsteignton, Devon, sold off an asking price of £1m, both of which had a strong mix of food, drink and accommodation sales, the market for good-quality freehouses is without doubt the best it has been for many years.

Leasehold public houses are also receiving significant interest, just so long as vendors remain realistic with their pricing expectations, and with the recent vote by MPs to give tenants greater choice on purchasing beer on the free market, appetite for leasehold pubs is certainly on the increase.

Budding entrepreneurs​

The trend of the year has been a gradual improvement in the market and while the general election in 2015 may well have an unsettling effect on the UK economy as a whole, budding entrepreneurs are now entering a market, which has seen a huge amount of change since 2008, and as far back as the smoking ban, which came into place on 1 July 2007.

Publicans have always been resilient to change, which is something they are likely to have to continue to deal with for the foreseeable future. The increase in the minimum wage and rising utility bills have made it difficult for pubs with a limited customer offering to adapt to changing economic conditions. With overused stats regarding the closure of pubs constantly being bandied around, those operators that continue to evolve their business are seeing the positive effects of a progressive market — especially with bum-per trading figures being reported in August by many operators in the south-west.

Acquisitions​

Corporate pub operators are becoming more acquisitive with Heartstone Inns purchasing the Cockhaven Manor — evidence that confidence among the corporates is returning. In addition, entrepreneurs David Bruce and Clive Watson, the team behind Capital Pub Company that was sold to Greene King, have announced they are seeking £100m to buy circa 50 inns in historic British towns, along with the former director of Fuller’s, John Roberts. Their aim is to overhaul non-branded inns to focus on locally sourced food and beer, often from microbreweries. This is a strong indication that there is improving appetite for licensed trade operations.

We remain optimistic for 2015, and expect to be announcing a number of significant pub transactions in the new year, including new build sites, good-quality freeholds and both free-of-tie and tied leaseholds. With largely positive news being announced across the hospitality sector, we believe this may well be the perfect time to venture on to the other side of the bar.

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