Spring likely to 'kick start' trade

Bill Evans Sales Negotiator, Fleurets West & South Wales

Wales is no different from any other area, in what it is experiencing in terms of reduced trade, due to the slowdown in consumer spending. This follows a poor trading summer (weather wise) and the first winter of the smoking ban.

It is clear that many lenders regard the leasehold market as 'sub-prime' lending and further collateral/ guarantees will be required to fund leasehold sales. Freeholds are a different matter and established businesses, with reliable accounting history, are still attracting purchasers and funding, albeit the loan to price ratio is decreasing as banks and other lending sources seek to lessen their risk.

There are a number of major companies offloading 'bottom end disposals' and these have readily attracted purchasers. Many of these units are closed and offer a reduced-cost entry to the freehold market.

Other units are purchased for alternative use, chiefly residential, where planning consent can be readily available. I have been impressed by the ingenious efforts that operators have made to comply with the smoking ban legislation and as it is a 'level playing field' for all, I have not seen buyers deterred, except for, obviously, the landlocked pubs with no outside options available. These units, both freehold and leasehold, will be difficult to sell and in many cases the majority of their customers have historically been smokers.

Predictions for the next twelve months are always difficult as the current volatility of the market indicates that there is no simple remedy for the economy. However, spring is approaching, which traditionally kick starts the market and I hope that 2008 will be no different.