Canny City investors are building funds to buy up surplus pubs in prime areas of the South as the hospitality sector emerges from three decades of doom and gloom. That’s according to Colliers International hotels director Peter Brunt, who said the fast-recovering sector was now being seen as a prime investment territory.
Values to rise with growing operating revenues
“Even previously hard to shift premises outside the top locations are attracting increased attention from commercial property investors. Operators across the West Country are telling us that revenues are finally showing some real growth. Buyers need to recognise that values are likely to rise with them so now is the time to step in.
“There are also signs of City money returning to the market with funds being put together to buy pubs.
“Although this trend is presently confined to prime areas in the south and south east the growing shortage of available property in those areas is bound to force investors to look at opportunities further afield as they struggle to hit acquisition targets.”
Limited supply
He went on: “Private buyers too are focussed on those prime areas but will also find the need to look further afield as supply of the best quality property is very limited. A good example is The Talbot Inn at Newnham Bridge. Although it’s a little off the beaten track, it’s got everything else going for it – good looking, accessible, very well presented and profit making. Being west of the M5 takes it lies outside many buyers’ target area but I am seeing growing interest despite that.”
Deutsche Bank report
Peter’s comments follow an equally upbeat report on the UK’s pub and restaurant industry from Deutsche Bank, which said pub groups are emerging from the downturn in much better shape than they have been for the past three decades.
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