Specialist business property adviser, Christie & Co, has been reflecting on a busy year of deals in the UK pub trade.
It has launched its annual Business Outlook report, entitled Adjust, Advance, Adapt, which looks back on 2021 and attempts to predict activity in 2022.
The report reveals that the transactional market remained buoyant in 2021, and Christie & Co’s pub sales volumes were up 103% on the previous year.
Despite the unpredictability caused by the emergence of new covid variants throughout the year, 47% of these properties were sold to private buyers and 87% were purchased for continued use as a pub, indicating there remains an appetite for purchasers to buy and operate pubs.
Freehold assets with letting rooms in popular rural and coastal tourist locations remained most attractive, driven by the staycation boom.
Throughout 2021, the large pool of buyers seeking quality pubs outstripped the level of supply, as many operators have managed to weather the worst of the covid storm due to government support.
The imbalance in the demand and supply equilibrium has offset any potential negative impact of trading and cost issues, and created an upwards movement in Christie & Co’s pub price index for 2021, with average prices increasing 3.3% on the previous year.
Market predictions
Looking to the year ahead, the report outlines Christie & Co’s market predictions:
- Race to ‘premiumisation’ and operational efficiencies to help drive margins and offset operational headwinds and inflation.
- Benefits of ‘localisation’ and working from home set to continue for regional towns and cities.
- Increase in supply as operators re-evaluate their estate post-covid, taking into account capital expenditure and other increasing cost pressures. Operators who fail to invest will fall behind.
- Continuing competition between the fast-growing private equity-backed companies as well as multiple operators and regional pubcos/brewers eager to fulfil their expansion plans will lead to a greater diversity of buyers and sellers this year.
Stephen Owens, managing director, pubs and restaurants, at Christie & Co, said: “During 2021, we saw demand exceeding supply for the right kind of assets and this resulted in positive price movements, notwithstanding the operational and financial challenges that covid brought.
“As we move into 2022, and with hopefully the worst of the pandemic behind us, we can expect a more normal trading environment, with an increasing number of buyers and sellers returning to the market.”
