Average pub property values down 20% during 2009

15th January 2010, 10:37am

The slowdown in the economy, and its impact on the level of transactions across the pub sector, saw average pub values decline by 20.1% in 2009, compared to a decline of 11.63% in 2008.

Neil Morgan, head of Pubs at Christie + Co said: "On a transactional level, deal activity increased in 2009, compared to the previous year, although volumes were nowhere near pre-credit crunch levels. Prospective buyers continued to find it hard to raise finance, whilst others continued to play a waiting game, to see when values would bottom out.

"As we predicted in Christie + Co's Business Outlook 2009 publication, regional brewers and multi-site operators continued to take advantage of the lack of competition from national chains, to bolster their estates through freehold acquisitions — especially in the first half of the year."

Distressed assets will continue to come to the market, especially in the first half of the year, but Christie + Co also expects transactional activity to increase steadily, as the banks start to free up further funding and more interested parties return to the market.

Morgan continued: "Regional brewers and multi-site operators will continue to make selective acquisitions and will come out of the recession well placed to continue their growth over the next 12 months. In the latter half of the year, we could see the return of some national chains to the acquisition trail.

"We will continue to see pub closures in 2010. Whilst this is clearly unfortunate on an individual level, we firmly believe that a reduction from the current 54,000 pubs is in the long-term interests of the sector. Businesses that survive the current economic difficulties will be more robust and better placed to have a long-term future."

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