COMMERCIAL
Freeholds £100 per square Foot
Indeed, he says, freehold prices for some former pubs are now so cheap that in some cases there’s only a negligible difference between the cost of renting and the cost of acquiring a property. Some freehold pubs are selling for less than £100 a square foot. That makes pub sites attractive to diverse owners – retail operators, car dealers, and even medical centres. High street pubs in particular, he says, “tick all the right boxes” for business. Estate pubs in residential areas are also useful for such uses as doctors’ or dentists’ surgeries and convenience stores, as they are close to their customer base. He says, in particular, that the big pubcos – Enterprise, Punch, and so on – have changed their attitude to the market. “The major pubcos have reversed their position from being the most active buyers of pubs to now being sellers, of both bottom-end and in some cases, better quality assets.” That’s led to far more pubs being available, and more realistic pricing, too. Many pubcos bought properties during the boom years up to 2007, and now face high debt burdens, so they’re keen to sell in order to reduce their
For sale or to let
FLEURETS:
Ye Olde Saltbrook Inn, Stourbridge, West Midlands. Freehold pub in a mainly industrial area.
Ted Tuppen, MD Enterprise Inns, criticised Christie & Co
for ‘talking down’ his pub values but conceded that ‘This year will be a year to stabilise.’
TED TUPPEN MD ENTErPrisE iNN
balance sheet gearing. Punch, for instance, recently instructed Colliers CRE to sell 68 properties which are all part of its ‘turnaround division’ – all are new to the market. Several of the pubcos are now selling pubs with restrictive covenants forbidding future use as a pub. Jonathan Mail, head of policy and public affairs at the Campaign for Real Ale, says Enterprise Inns used restrictive covenants on 70 per cent of the pubs they sell. Brewers such as Thwaites are also using these covenants to ensure pubs that are sold off can’t later return to compete with other local Thwaites pubs. However, Enterprise and
Punch appear to have scrapped the practice, following concerns expressed by the House of Commons Business and Enterprise Select Committee.
101 uses For a dead pub
Gavin Sherman estimates that less than half of the pubs he sells are going for residential use – most of those in the country, where the village pub is often a stunning building in a central location. About 20 per cent of the pubs Paramount handles end up in restaurant use, while up to a third of all pubs are now going into use as retail operations. “A lot are changing hands for convenience stores, doctors, dentists, or vets,” he says, “and many high street pubs are going to fast food uses such as Domino’s pizza.” The Campaign for Real Ale gives a slightly different split; according to CAMRA, 31 per cent of permanently shut pubs are demolished, with 36 per cent remaining in use as restaurants or cafes, and 33 per cent going to other alternative use – mainly residential. It’s interesting to see how the fall in
house prices has led to a dramatic decline in the proportion of pubs being sold for
The major pubcos that were the most
active buyers are now the sellers.’
NEiL MOrGAN CHrisTiE & CO
PROPERTYdrum MARCH 2010 59
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