Property specialist Christie & Co has released its three big trend forecasts for the pub sector after publishing its annual Business Outlook report.
Despite being one of the worst hit sectors by the ongoing Covid-19 pandemic, the company said that investor appetite in the sector remains healthy and many buyers appear undeterred from the unprecedented events of 2020.
Since April 2020, it has recorded an uptick in market activity, driven largely by smaller, single asset transactions.
Its pub price index for 2020 observed a 6.4% decrease in average prices, which follows a period of annual increases and some of the busiest years of activity in a decade.
Looking to the year ahead, Christie & Co outlined its top three market predictions:
1. As government support in the form of grants, moratoria and rates relief begins to ease in Q2, a wave of distressed assets is expected to come to market, due to ‘zombie’ companies unable to pay off debt or raise cash to grow.
2. City centre, wet-led and late-night venues will be amongst the last to recover, however community-based settings in regional, rural and coastal destinations will continue to perform well and attract the most investor interest, as people continue to work remotely and stay closer to home.
3. Large pub companies will continue to divest under-performing assets, both in the tenanted and managed house segments, presenting a good opportunity for equity-backed buyers (both new entrants and existing operators) to acquire freehold property portfolios of scale.
Stephen Owens, managing director of pubs & Restaurants at Christie & Co, said: “2020 was undoubtedly one of the most difficult years that the sector has faced in recent times. However, there is now light at the end of the tunnel with the vaccine roll outs, and for those which come out the other side we expect a strong rebound with customers keen to return to their local pubs and bars. With strong buyer sentiment and appetite, we predict a busy year ahead.”