What’s selling in the pubs and restaurants market?

From location and financial robustness to property condition and pricing, this article offers insight for buyers and sellers looking to navigate the vibrant hospitality industry this year. 

Location

The location of a pub or restaurant can play a pivotal role in its success – for example, high footfall and affluent areas can significantly impact profitability.

“We are seeing demand for both urban and rural pubs in the current market. High footfall, or passing traffic, can be a crucial factor in a pub or restaurant’s success. Pubs in high-traffic locations attract a steady stream of patrons, which is essential for consistent customer flow and therefore profitability,” said Alex.

“An area’s affluence can matter, too. Pubs and restaurants in ‘wealthier’ areas benefit from customers who typically spend more, which is vital for maintaining profitability amid rising operational costs. Spend per head remains solid in the market as long as customers have a good perceived value-for-money,” said Tim. “We’re also seeing a growing appetite for ‘experiential’ dining. Venues which offer unique experiences thrive in these areas where customers have more disposable income for leisure activities.”

Financial robustness

Financial stability is essential for both buyers and sellers in the pub industry. It’s important to get your accounts in order and make the necessary preparations ahead of time, especially in the face of rising cost pressures.

“With increasing operational costs, having a robust set of financial accounts is crucial, especially for new or less experienced operators. It helps demonstrate your financial stability and is attractive to potential buyers, leading to quicker transactions and potentially higher sale prices,” said Alex.

Tim added, “Your agent can advise you on financial fundamentals from the start of the sales process, including guidance on optimising operational costs and improving profitability.”

Property condition

The condition of a property impacts its attractiveness to buyers. “Well-maintained pubs are more attractive to buyers as they require less immediate investment and are ready for operation,” said Tim. “Properties needing minimal refurbishment instil greater confidence in buyers which in turn helps deliver quicker transactions and higher sale prices. And, unless priced accordingly, many investors prefer properties that are ready to trade, to avoid the uncertainties and additional expenses associated with extensive renovations.”

Covenants

It’s important to consider any covenants which apply to the building or the land it sits on, as these can pose challenges during the sale process and impact the operation of the business.

“Covenants such as listings could mean a buyer faces increased costs and restrictions on usage or development. Pubs can also be affected by community preservations like Asset of Community Value (ACV) designations: these emphasise the importance of pubs to local communities, but can result in additional challenges for vendors and buyers during the sales process,” said Tim.

Price

Pricing is a critical factor in attracting buyers, and there are several key factors that operators should consider.

“Pubs with a higher Adjusted Net Profit multiple are more attractive to buyers, as this indicates strong financial performance and the potential for good returns,” explained Alex. “Pubs that are deemed to be good value consistently attract buyer interest, as they offer a compelling investment opportunity with lower risk. We’re observing high demand for freehold pubs priced at around £600,000 and below.”

“For operators looking to buy a leasehold property, there are many factors you need to scrutinize too: rent versus turnover, lease length and protection, breaks and rent reviews, ties versus free of tie, new lease flexibility.”

Certain lifestyle businesses

Lifestyle businesses which offer unique dining experiences and strong value propositions are gaining popularity in the industry.

“One particular area which is rapidly growing in popularity is the ‘lifestyle business’ – an opportunity to live and operate a unique business under one roof,” Tim said. “Tea rooms and cafés are increasingly popular, attracting a diverse customer base who seek fun and cosy dining experiences. These businesses are achieving impressive sales results too.”

“The appeal of lifestyle businesses lies in their ability to offer a strong value proposition, combining charm and community appeal with manageable operational demands. The trend towards lifestyle businesses reflects a broader consumer shift towards supporting local, independent establishments that provide personalized and memorable experiences,” notes Alex.

If you’re considering selling your business and would like advice, get in touch with our Pubs & Restaurants team today.

For more information, please contact:

Tim Widdows, Associate Director – Pubs & Restaurants
P: +44 7795 037 676 or E: tim.widdows@christie.com

Alex Rex, Associate Director – Pubs & Restaurants
P: +44 7540 061864or E: alex.rex@christie.com