Managing Director - Pubs & Restaurants
+44 20 7227 0778 View Team


The majority of the pubs that have been sold were poorly located, outdated, under invested and faced too much competition. As a result we are now left with an industry which is leaner, fitter and more sustainable.

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There continues to be plenty of private equity interest in the sector targeting small multiple groups to either bolt on to existing portfolios or use as a platform for future acquisitions. The freehouse market has steadily grown over the last few years as pubcos released assets back into the market to pay down debt.  There are now more pubs in private ownership than ever before and the freehouse sector - which currently stands at around 21,000 pubs - is likely to grow and has overtaken the number of tenanted and leased pubs.

Managed houses continue to be in demand and in short supply, prompting pubcos to transfer suitably large assets from their leased and tenanted estates.  This process will perhaps be accelerated by the new legislation (Market Rent Only option “MRO”).

We have already seen ahead of the legislative changes, the large pubcos taking actions to mitigate any adverse implications by transferring pubs into managed or franchised formats; setting up managed house divisions where they do not exist and granting shorter term agreements.
It is difficult at this stage to predict the ultimate impact on the sector once the legislation comes into force other than it seems inevitable that more pubs will be converted into managed or franchised formats. The free of tie / freehouse sector will grow and perhaps an unintended consequence is that investment in tied pubs will contract, certainly in the short term. 

Our analysis of transactions during 2015 reveals that pub prices rose 10.1% during the year. This continued the rising trajectory of the market in 2014, when prices rose 8.6%.  Overall, there is renewed confidence in the marketplace and a slightly improved appetite amongst the major lenders to lend into the pub sector, be it for individual assets or groups.
Whilst pub closure programmes do continue, this tends to be at the bottom end of the market in unviable locations and the rate of pub closures is flattening out; we are now reaching a more sustainable number of pubs in the market. The pubs sold by Christie & Co marked as distressed has halved in 2015, a clear sign that the pubs sector is showing recovery, supported by overall economic improvement in the UK.
One of the last sizeable managed house portfolios, Tattershall Castle Group (TCG), was sold by Christie & Co in October 2015 and further diminishes the availability of managed house stock in the market.  Demand for these types of assets will continue in 2016, ultimately leading to a further increase in values and a shift in interest from pubcos, investors and private equity players towards the acquisition of single sites or smaller multiple operators who have significantly increased in numbers over the past five years. As there are now fewer managed house portfolios the new influx of buyers to the market have a smaller pond to fish in which will also push up prices.  

This shift in the market provides a real opportunity for small multiples operators, of which there are over 300 in the UK, to take advantage and command higher multiples for their businesses. In 2016 we predict an increase in sub £20m pub group deals or mergers and acquisitions by multi site owners who see an overall objective in exiting at a future date, attracting competition from existing managed house pubcos and investors to drive up price.
Positively, 84% of freehold pubs sold by Christie & Co in 2015 were to buyers retaining the pub for continued licensed use, a further increase of 4% on the previous year and 17% on 2013,and the highest recorded percentage in five years.  As total pub numbers in the UK have reduced what remains are more viable, sustainable trading entities. Only 8% of total number of pubs sold by Christie & Co were for residential use or development, and only 3% of pubs sold were for conversion to retail convenience store use.

Over half of the pubs not sold for continued pub use still provide a local amenity and employment opportunities while a staggering 92% of total freehold pubs sold by Christie & Co remain as businesses providing support to the local community. 

The ALMR Christie & CO Benchmarking Report

The ALMR Christie & Co Benchmarking Report, the most comprehensive study of its kind in licensed hospitalit, has been launched and benchmarks operating costs, market trends and sector performance.

This is the tenth edition of the report and shows the average costs associated with running a pub at a seven-year high - with payroll costs accounting for almost 30% of turnover. It also underlines the continued evolution of the licensed hospitality sector with food sales now accounting for 32% of revenue. 

To view highlights from the report, please use the button below to download the pdf. If you would like to purchase the full report, please contact the ALMR - you can link through to their website using this logo.



worth of assets advised and transacted on


of pubs transacted by Christie & Co were retained as licensed premises

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Pubs for sale – trends in the regions

The latest Greene King Leisure Spend Tracker shows that eating out spend grew 6% year-on-year in June with a 5% rise in drinking out. The British Beer and Pub Association also reported that there are now more than 1,400 breweries in Britain, opening at a rate of 3 per week. This success has been most notable in London where the numbers doubled last year.

The pub sector in London has gone from strength to strength over the past few years with many of the smaller independent pub companies looking to expand. We have seen the return of good levels of premiums being paid for the right location and ‘free of tie’ lease market. As funding slowly becomes more available the freehold market is also moving forward - although many of the price increases are tied to residential property.

With competition for limited space putting pressure on rental values and premium prices, many operators are seeing the advantages of commuter town properties where value for money is obvious. The buyer profile has also evolved with more entrepreneurial operators and small multiple groups as well as the existing operator on the look-out for new opportunities.

In the Midlands and Anglia region we are seeing less distress in the sector, with the majority of instructions coming to market for more natural reasons such as retirement or an upgrade to new premises. There is high demand for honey pot locations such as Stratford-upon-Avon and the Cotswolds as well as high footfall traffic sites.

Other sought after properties include those with ‘free of tie’ leases and those with external areas such as gardens and car parks. Life style buyers have slowed since the recession but regional / national operators are back in the market and acquiring sites along with experienced operators looking to build on their group.

We have seen a definite uplift in activity across the North of England too in terms of both prices being achieved and the number of buyers actively looking for pubs. This is the clearest indicator that the appetite of buyers has improved and that the market is improving. Food led; free of tie, freehold and leasehold businesses are still the most successful. This is due to the diversity they can offer and the freedom to choose suppliers and be more aggressive with their pricing.

We are working with property investors and developers with cash available, looking for all cheap deals, to experienced operators and groups looking to get into the right site. Buyers are generally looking for good quality, trading businesses as well as vacant properties in strong locations.

The introduction of the reduced ‘drink driving’ limits in Scotland have greatly impacted on early and late evening trade due to consumer concerns of being ‘over the limit’. Nonetheless the sector is improving slowly as the banks begin to look again at the hospitality sector. We are seeing fewer corporate disposals than in previous years as they have repositioned their estates and are now looking to stabilise.

Location is still vital with town centres and cities still being popular and the rural, lifestyle business still not as popular as it once was. Food is becoming more important as operators look to diversify from the traditional wet led pub, however,  the ‘boozer’ is still very popular with regional operators as they look to maintain their beer volumes in a declining market.

Again the picture is very positive in the South West with the sector returning to profitability, especially for those who have adapted to the market and base their business on food and accommodation led offerings. Businesses with well-developed trade returning a profit with scope for further development in attractive coastal or in proximity to major towns are the most successful.

Unlike the rest of the provinces there is a definite trend towards the lifestyle buyer in the South of England where the number of people searching for a change of pace has not been this high since the credit crunch. At the other end of the spectrum we are working with more equity groups looking to acquire properties in key locations. The market is very buoyant, with a range of buyers looking at a variety of pubs. Food led pubs and those with good quality letting rooms seem to be the ones with the strongest trade.


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