Also of great encouragement has been the
return to the market — principally in the
leisure and hospitality sectors, but also in
care and education — of some entrepreneurs
who had exited the scene at record prices
in 2006 and 2007. Many returned in order
to buy back businesses they had previously
owned — one only has to see the new
ownership structures for the likes of Luminar
Leisure to understand how experienced
operators see the value in familiar businesses.
For many, returning to previously owned
businesses is the safest investment they can
make and, in many cases, avoids the need to
undertake arduous due diligence.
New lending vehicles offer hope
Both for those who are making a return
to owning businesses and those already
entrenched, there have been heartening signs
of the emergence of new lending platforms,
even though traditional high street lenders
have been, understandably, reluctant to expand
their existing overall exposure to our sectors.
One such is the Shawbrook Bank, led by the
former Royal Bank of Scotland chief executive
Sir George Mathewson, which aims to lend
£250 million to small businesses in its first
year and recently provided funding to the
private buyer of Callow Hall, a former von
Essen Hotel in Derbyshire. Other vehicles, such
as regional development funds and online loan/
exchange facilitators, are also beginning to play
their part. And we await with interest to see if
the new owners of Northern Rock will engage
in commercial lending.
The slight concern is that all the new facilities
are chiefly aimed at small businesses which,
while heartening for this market, could leave a
drought of debt finance for larger transactions.
The other potential losers could be start-ups
which in 2011 were not encouraged by the
anticipated boost from the Government’s Project
Merlin funding which, as David Grant, Head of
UK Business Mortgages for Christie Finance
predicted earlier in the year, ended up being
geared towards existing operators rather than
encouraging new business.
Role of Christie + Co recognised
During 2011 we were delighted to receive two
accolades from Estates Gazette Group — first,
as the UK’s most active agents in Leisure and
Hotels and latterly as Property Adviser of the
Year in Leisure. This is fantastic recognition
of the strength in depth we have in our 300
people across 25 offices throughout the UK,
Europe and the Middle East.
However, success on the agency side only
tells half the story as our advisory and
valuation services teams provided a higher
proportion of our business activity than
ever before. Our Bank Support and Business
Recovery team not only provided continuity
with our agency business, but also worked
with banks to provide distressed businesses
with the advice and knowledge they needed
to inform their turnaround and recovery
decision-making processes. This work is
symptomatic of the contribution all our teams
make to the wider business community.
And that’s also not to forget our sister
companies. With businesses concentrating on
maximising margins from operating activities
at a time when like-for-like sales are hard-
won, the likes of Venners and Orridge, which
operate in the licensed and retail stocktaking
sectors respectively, are noticing, and
fulfilling, strong demand for their services.
Lively times ahead
Looking ahead, we can expect a good supply
of business offerings early in the year,
especially as the banks and their customers
will remain committed to disposing of assets
in order to reduce gearing.
Increasingly we will see the sale of some
‘
trophy’ assets, where the value is viewed as
disproportionate to the commercial return.
Movement in average prices
across our sectors in 2011
-2.48%
Already, in the public house sector, Enterprise
Inns has outlined its strategy to offload the
‘
best 100’ pubs in its estate this year.
The availability of high quality and trophy assets
will present a once-in-a-lifetime opportunity for
niche investors — particularly those with cash.
We may also see new investors emerging
amongst graduates who face the fiercest
competition for employment we’ve seen for
some time. Funded by the ‘bank of mum
and dad’, these new investors may use the
opportunities, and the filial funding, to both
create and purchase businesses and develop
them with innovation and flair to appeal to
their own generation of connected customers.
As a bonus, family and friends should be
able to retain attractive tax reliefs through
the recently announced Seed Enterprise
Investment Scheme.
Emerging investors, fresh ideas and new
businesses should be encouraged more
than ever as we continue to face up to the
economic uncertainty.
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