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Buyer demand indicates long term potential of specialist sectors

Specialist business property adviser, Christie & Co provides an overview of the regional market in the South West & South Wales for the first half of 2019, reflecting on previous predictions, emerging trends and challenges facing the sectors.

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Christie & Co reports buyer appetite throughout the South West remains strong across its sectors, despite a greater level of caution in the market, as buyers become increasingly sensitive towards pricing amongst ongoing uncertainty. Although the slowdown in the housing market has made it more difficult for new entrants to acquire lifestyle businesses in the West Country, Christie & Co’s strong pipeline of deals throughout the South West & South Wales indicates long term confidence in its specialist sectors.


The increasing quality of care home stock in the region is attracting a wide variety of purchasers from corporate operators though to first time buyers. Whilst capital appreciation has remained subdued, Christie & Co’s activity in the West Country has been strong throughout the first half of the year, with a 48% increase in viewing numbers and 86% increase in offers on their clients’ healthcare businesses. The widely publicised staffing shortages are becoming ever more acute in the more rural areas, which limits buyer demand, and values are softening in these more remote locations. Some nursing home operators are considering de-registering their nursing care given the challenges they face in the recruitment of qualified staff.  


The region enjoys the same level of demand as in London and the South East, particularly areas of larger conurbation, such as Bristol and Exeter. South Wales is a diverse market with extensive corporate activity and increasing focus on private practices in and around the major towns and cities, such as Cardiff and Swansea. In western parts of both the South West & South Wales, the market tends to be dominated by independent operators and generally, but not exclusively, smaller practices. 

Recruitment of dentists is a common theme throughout certain parts of the UK and the South West & South Wales in particular are not immune. The more remote areas of the region tend to find recruitment more challenging, where buyer demand tends to soften slightly as well.


The regional transactional hotel market is predominantly characterised by high quality single asset disposals by independent operators, who still make up the majority of owners in this region. Christie & Co notes an increasing number of independent hotels are sold to expanding hotel groups, who are able to identify the upside through investment and operational efficiencies, although independent buyers are still identified as the largest and most active buyer type.  

Demand remains strong for quality assets, particularly for businesses with long standing revenues and sustainable healthy profit margins, while guesthouse and lifestyle businesses continue to attract strong interest from buyers moving into the region.

At the same time, the market has also seen increased interest in self-service accommodation, especially in city centre locations. Buyer appetite has shifted towards accommodation-led businesses with many buyers now preferring assets producing 70% or more of their annual turnover through accommodation sales as opposed to F&B, room hire or functions, although demand for good quality, full serviced hotels remains stable, as investors choose to cautiously look beyond political and economic uncertainties. 

The South Wales market does appear to be cooling with regards to activity on 2018 figures, although 2018 was an exceptional year in terms of transactions. There are a high percentage of lifestyle businesses which are attracting interest from buyers nationally. The region has also seen an increasing number of independent hotels sold to expanding small and medium sized hotel groups, who identify the upside in these assets. 

Pubs & Restaurants

Christie & Co has seen a reasonable level of interest from prospective independent buyers and increased interest from small group and larger national corporate operators, despite political uncertainty regarding Brexit affecting buyers’ willingness to commit. Larger properties with a strong food and accommodation offering are highly in demand among multiple operators and brewers and Christie & Co also reports strong interest from developers and investors looking for alternative use.

Instructions in the region remain relatively steady, despite a lack of availability of city centre freehold properties, according to Christie & Co. Activity has shifted towards the countryside and smaller towns and villages, as city centres offer fewer freehold opportunities. The pipeline for developments in towns throughout the region will create new opportunities for pub and restaurant operators.


Activity levels within the pharmacy sector have increased across the region, according to Christie & Co, largely due to an uptick in the number of instructions as operators seek to divest non-performing businesses. At the lower end of the market, buyer demand remains strong among first time buyers, many of which see opportunity to gain a foot on the ownership ladder.


Recently, there has been a shift in approach from larger groups, with many now looking to acquire additional stores. Christie & Co notes an increasingly popular trend among these buyers to consider stores achieving sales of £20,000 or above per week. Interest in stores turning over less than £15,000 per week remains where there is opportunity to increase weekly sales. This shift in activity means there are an increasing number of stores available to independent operators which may have previously been more difficult to acquire.  

Demand for convenience stores with a turnover of £10,000 per week is good so long as the opportunity comes at an affordable price. Consumer habits continue to change, with more people moving towards ‘little and often’ shopping, presenting new owners with the opportunity to introduce new profitable lines and services, such as parcel delivery. 

Christie & Co reports a high volume of recent forecourt sales which have achieved record prices – a trend which set to continue. Demand for petrol filling stations remains extremely high and multiple site operators continue to show interest in freehold and leasehold sites across the region. There has been a clear move by retailers to improve profitable convenience retail offerings at forecourts and add-on services, such as food-to-go. 

Rob Kinsman, Regional Director – South West comments,

“Whilst there is greater hesitancy in the market, our pipeline of deals in the South West has never been greater. This deal volume clearly illustrates the underlying demand from innovative operators who see the long term potential in our sectors. We are predicting another bumper summer season in the West Country for our leisure based clients and the region will continue to provide exciting opportunities across our specialist sectors.”

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