Specialist business property adviser, Christie & Co, has launched its Business Outlook 2024 report, reflecting upon key business themes and market activity. It also looks ahead at what 2024 may bring across the sectors in which the business operates.
It has reported a 20% decline in transaction volumes in 2023 off the back of a high inflationary environment. Sellers held out for pricing, and buyers adjusted for expected increased operating and financing costs.
Last year was largely dominated by several significant multi-property disposal campaigns for corporate operators, who sought to dispose of their poorer performing assets.
Bringing to market packages of between 25 and 100+ properties for sale on an individual or sub-group basis has realised strong outcomes in a market where independent and regional buyer appetite remains very positive.
Due to inflation, rising costs, and many professionals suspending their acquisition plans, average prices of businesses transacted by Christie & Co decreased by an average of 3.5% in 2023, with the exception of the retail sector which increased by 0.4%. Average sale prices across the pubs sector were down by 8.1%.
In 2023, Christie & Co continued to see an increase in operational costs and inflationary pressures, and the increase in the national living wage is only expected to enhance these pressures across the board.
While some sectors have offset rising costs onto consumers, with price increases of up to 25%, as seen in the restaurant sector, this will undoubtedly continue to create significant pressures on the bottom line for businesses in 2024.
Market sentiment for 2024 has improved in comparison to expectations for 2023. According to data from Christie & Co’s annual sentiment survey, 46% of sector professionals have reported they feel positive for the year ahead, and 75% reported they plan to buy or sell in 2024.
“After starting to see business return towards more normalised levels following the pandemic, 2023 stuttered on the back of the high inflation and a further five increases in interest rates,” said Darren Bond, global managing director at Christie & Co.
“We do, however, expect to see a more positive turn in 2024, with our sentiment survey revealing many operators have active acquisition or sale plans for the year ahead. In our European teams, we see further growth opportunities to add more specialists in Austria, France, and Spain over the coming years.”
