A desirable area with many affluent towns and villages, freehold gastropubs with letting rooms, as well as strong high turnover businesses in locations like the Surrey Hills, continue to be attractive to both corporate and independent buyers. Likewise in the lower end of the market, closed pubs are being targeted by multiple operators as well as developers, who want these sites so they can imprint their unique trading concepts on a blank canvas.
Despite this developer interest however, I am pleased to report that Christie & Co has facilitated the sale of several closed pubs in the Surrey and Hampshire areas to those who want to reopen them. Examples of this include the leasing of Quayside Bar and Restaurant in Southampton which had been closed for seven years to an experienced operator. Similarly, The Village Inn in Petersfield was also sold recently to an experienced licensed operator having been closed for a year. The Coach House, a pub in Gosport has also been reopened following a refurbishment after we brokered the sale to a local business owner. These transactions demonstrate the growing strength and potential of the licensed marketplace as we head into the first part of 2017.
On the buyer side, contrary to other regions in the UK, we are seeing fewer lifestyle business operators looking for opportunities. The high property values in the South East generally mean that prospective purchasers need a significant amount of capital to enter the pub market, although banks are increasing their lending in this sector.
A number of private equity backed operators and breweries are currently looking to acquire in the South East. An off-market sale which we completed recently in Surrey for Wonersh’s Grantley Arms delivered numerous bids from local companies looking to expand their operations. The pub was eventually sold in excess of the owner’s expectations. Competition like this for high quality pubs/restaurants is pushing prices up further so it’s great news for publicans who are looking to sell.
A few deals were lost in the wake of Brexit. However, they have since been re-agreed to new buyers and interestingly many at higher levels. This illustrates that the market is continuing to become more robust, the improving economy settling previously cautious buyers and particularly overseas investors who are increasingly looking at UK business property in the hospitality sector. In essence, the biggest cost the marketplace has had to bear from Brexit is time and uncertainty.
Regional hotspots to look out for in 2017 include Godalming and Horsham due to the proposal for 1,800 homes to be built in Dunsfold Park. Hampshire villages such as Hordle and East Linton are also seeing planning permission going ahead for developments which would add hundreds of residential properties to the area. South Wiltshire is again looking at proposed residential developments to include 100s of new homes. These types of plans are generally good news for pub owners as increases in footfall will have a positive trading impact.
We particularly expect to see many businesses developing their food offering and investing in their premises in 2017, driven by a predicted continuation of consumer spending and confidence. Overall, it looks to be an exciting year for pubs in the southern counties.