A year ago in Christie + Co’s
Business Outlook 2011
we reported
that despite the difficulties in the
business environment, average
property prices in hospitality,
leisure, care and retail businesses
had plateaued and perhaps had
emerged from the bottom of the
value curve.
Twelve months on and even the gloomiest
forecasters would never have predicted quite
how deep the recession would be, nor the extent
of the crisis that would engulf the financial
markets, particularly across the Eurozone.
Consequently, and in the face of continuing
economic uncertainty, the plateauing of
property prices in 2010 must now be viewed as
a step towards prices once again settling at a
lower level in 2011. However, this is a time for
realism and it should be acknowledged that
yield ranges remain on a par with those seen
in the 1990s. This is not new territory for the
sectors in which Christie + Co operates, it is
more a case of trading assets transacting at
former multiples of trading profit.
Cash transactions dominant
In 2011 we saw a transactional market where
cash was everything. In some cases, notably
for Christie + Co in its sales on behalf of
the administrators of a number of von Essen
Hotels, we saw cash deals being done as a
prelude to debt finance being secured.
Administrator-led sales were more common
during the year, but the market was able to
absorb the number of businesses being made
available for sale. This is surely a sign that
the market mechanism remains as effective as
ever, even as values change. There has been
no stasis, which has to be encouraging in
these difficult and financially uncertain times.
Chairman’s overview
“
In the face of continuing economic uncertainty, the plateauing of
property prices in 2010 must now be viewed as a step towards
prices once again settling at a lower level in 2011. However, yield
ranges remain on a par with those seen in the 1990s.”
David Rugg
Chairman
6
Business Outlook
2012
