01_
Banks will release further assets to
the market
02_
Over 2,000 pubs will be sold by the
pub companies
03_
Managed public house stock will
continue to be in high demand
04_
The late-night sector will remain
extremely challenging
05_
The private freehouse sector will grow
by at least 1,000
06_
There will be continued private equity
interest in the managed house sector and
emerging interest in the tenanted sector
Market
predictions
No tsunami of closures from
pubco disposals
Whilst the freehouse marketplace continues
to benefit from pubco disposals, there were
fears that the pub property market was
becoming flooded with tenanted pubs. In
retrospect those fears, and also the suspicion
that this would lead to an escalating rate of
pub closures, were largely unfounded.
The strategies pursued by the likes of Punch
and Admiral Taverns was not the signal for
disposals of tsunami proportions, nor of more
pubs being sold for development.
Instead, what we saw was a steady stream
of fairly-priced pub disposals from a number
of operators. Enterprise Inns, for instance,
disposed of over 400 pubs in 2011 and has
plans to dispose of 100 pubs from its high-
end estate in 2012. In our experience, where
there are good disposals, a better quality of
operator follows – both in the freehouse and
tenanted sectors.
And far from increasing the rate of attrition,
there is a real case for believing that
more sold pubs are staying as pubs under
new ownership.
In 2010, some 60 per cent of the pubs sold
by Christie + Co from the tenanted pubcos’
churn were bought to remain as pubs. With
the quality of proposition that the pubcos
are bringing to the marketplace now, not
>>
As with most years, the broader
public house sector experienced
highs and lows in terms of trading
performance and transactional
activity, while a question mark
still hovers over the key issues of
future investment and funding.
However, we can look back on a year that
was in part dynamic, in part unnerving –
but never dull.
Freehouses go ‘boom’, in a good way
In the private freehouse sector in 2011,
values remained lower than their historic
peak – meaning that vendors were disinclined
to place their assets on the market.
This certainly didn’t prevent the sector
growing during the year, as the corporate
operators who were engaged in estate
rationalisation and disposal activity placed
many reasonably-priced pubs on to the
market.
An encouraging by-product of this was
the return to the public house sector of
many entrepreneurs who had exited at or
about the peak. This is likely to provide for
a more competitive and, by extension,
higher quality sector.
to mention the volume, that percentage
increased to 64 per cent in 2011.
Moreover, of those pubs that do close, it
is reassuring, to a degree, that many are
retained for some form of leisure industry
usage, such as restaurants.
The pub market is still oversupplied and a
further 2,500 – 3,000 pubs need to go over
the next two or three years if we are to
achieve a sustainable marketplace, bringing
choice and quality for customers.
And what of the closed pub? Some are
serving, and will serve, their communities
better through alternative use. For instance,
during 2011, Christie + Co sold a pub in
Gloucestershire to the local Salvation Army
which intends to use the premises to create
a safe environment for local youth to meet,
share and pursue creative interests. This surely
has to be more valuable and healthy to the
community than a run-down, under-used pub?
Tenanted sector awaits the big deal
The market occupied by the pub tenancy
companies was largely quiet on the
transactional front in 2011 – until Scottish
&
Newcastle Pub Company’s acquisition of
RBS’s Galaxy pub estate was announced in
December. RBS was advised by Christie + Co
throughout the process.
2012
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