The report, ‘Business Outlook 2020: Focus on Business,’
reflects on the themes, activity and challenges of the previous year and forecasts what 2020 might bring across the regions in which Christie & Co operates, including the South East, with offices in Winchester, Maidstone and Reading.
In 2019, Christie & Co observed an appetite for care homes of all sizes, with those in excess of 40 registrations being more highly sought after. Buyers seeking funding for homes with less than 25 bedrooms faced difficulty, as traditional banks continued to take a conservative approach to lending. Many turned to challenger or alternative funders as a result, which kept activity moving within the sector. Moving into 2020, Christie & Co expect the demand for care homes to continue on an upwards trajectory, with purpose-built properties driving up accommodation standards.
Heading into 2020, Christie & Co anticipate high demand for hotels located in cities and rural locations throughout the South region. Hotel values are expected to stabilise moving through the next 12 months as we see new entrants to the market, such as first time and lifestyle buyers investing in this sector. South coast resorts can expect to benefit from the increasing demand for staycations, resulting in improved occupancy and yields for many owners and operators.
PUBS & RESTAURANTS
Demand for hospitality businesses in the region has increased due to reduced availability of quality stock. Christie & Co observed a trend in investor interest for lower cost assets which present an opportunity for development, particularly pubs which are closed or have historically traded poorly. Competition from the high street within the restaurant sector has been reflected with less transactions within this area of the market, but bucking the trend are coffee shops and tea rooms which are attractive lifestyle businesses.
The retail market in the south has remained resilient amid a backdrop of Brexit uncertainty, with more good quality businesses coming to market in 2019 than the prior year. The majority of deals have required bank funding and a large number of buyers have used Christie Finance to fund the deal when high street banks have not been prepared to lend directly to them. Christie & Co observed little distress amongst operators in the region, although factors such as rising wages and crime have been sighted as major ongoing challenges.
Ed Bellfield, Regional Director – South at Christie & Co comments, “There has been a notable uplift in activity in the South since the start of the year across all of our specialist sectors, especially from those looking for a lifestyle change in our pub, hotel and retail sectors, which we haven’t seen since before the financial crisis.
“The region offers some of the best freehold and leasehold opportunities in the country, and is being keenly watched by expanding operators as more owners cash in on their long-held investments, the future certainly looks optimistic for the Southern care, hospitality and retail markets.”