Andy Frisby - Associate

When we talk about the private market, we are generally referring to leasehold assignments, individual freehouse disposals (pubs and guesthouses) along with private lettings.

As leading players in the licensed property market we obviously keep a close eye on trends and data, and it’s this data that has highlighted the shift away from private completions to more corporate work in the past three years.
 
Having occupied 73 percent of sales across our network of seven offices, private sales now account for just 23%, with corporate sales taking up the remaining 77%.
 
So why and how did this happen? No one could have missed the collapse of the financial sector, which in turn has resulted in a lack of lending in the market. This has resulted in two things:
 

- A lack of funds has impacted on people’s ability to buy.

- Demand has dropped, and subsequently, so have the prices, resulting in good operators ‘sitting tight’ until the market improves.
 
As well as the impact from the financial sector, there has also been the continued backlash from the introduction of the smoking ban and the cut-price deals being advertised by supermarkets, with the net result seeing people being converted into home drinkers.
 
Last year alone, the casualty rate was high, including some high-profile names such as: Cains, Laurel Pub Company, Soho Clubs and Bars, Bar Room Bar and Premium Pubs and Bars, all of whom either went into administration, receivership or underwent some form of financial restructure.
 
I have another take on the market that sits alongside the financial issues, smoking and the supermarket discounting. As a country, I believe we’ve got ourselves into a situation that finds us over-pubbed. I genuinely believe that with the number of pubs that the industry was trying to sustain, there simply wasn’t/isn’t the business out there.

Current figures tell us that there are 53,500 pubs in the UK with over 39 closing a week. As more pubs disappear, I think we will find that those remaining units will enjoy improved trade and as a result, once through this tough time, we’ll probably end up with a better offering through a smaller number of pubs.

So what does this mean for those looking to buy or sell licensed property? Well, we’re already seeing a number of pubs coming to the market at nil premium, so you could argue that there are some bargains out there right now. On the flip side, it may be a while until the units that are currently trading better, hit the market, with owners ‘sitting tight’ until figures improve. That said, we are talking to some operators who are now resigned to the fact that there isn’t a quick fix and will, shortly, be putting their pubs onto the market.

As for the future, I confidently predict more change, a constantly shifting market and one that will inevitably throw up opportunities for the right operators. I also think that this time next year we’ll look back and see the licensed trade in a very different light. Sure, we’ll still have the great British pub, but many will have taken on radical overhauls and operators will have found new opportunities, changing the use of the pub, maybe shifting skills to build coffee shops, where pubs once stood. Whichever way the market goes, I think one thing is for sure, there’s no sector of the market that is dead, each is just looking for the right operator to seize, or create, the opportunity.