Competition hots up as pub firms target Scotland

Extract from Commercial Report, Jim Dow, The Scotsman, 8 July 2003

The licensed trade property market continues to boom and there is a dearth of pubs, restaurants, hotels and guesthouses coming on to the market to meet demand. Closing dates and competitive bidding, comparative newcomers to the sector, are pushing up prices.

Brian Sheldon, of Christie’s Glasgow office, says: “It would appear that the increase in activity from the many pub companies who have targeted Scotland to develop their tenancy/leased divisions has sparked many off-market deals with many private buyers missing out.

“Demand for the traditional village inn and prominent town centre lock-up public houses is increasing. We are constantly surprised at what can be achieved for these businesses through competitive bidding.”

With regard to the market for high street pubs, the expansion over the past five years by major plc companies through portfolios of branded outlets has reduced significantly.

Up until now, says Sheldon, the major operators would have simply outbid the private sector in order to gain representation. This is no longer the case, with many operators seeking to exit from some high rental outlets in the city centre.

The main players do not like the market being saturated, but for private entrepreneurs there are opportunities to carve out a niche. This may well be the market driver over the next three to four years.

The provincial hotel and guesthouse sector is experiencing unprecedented activity. Businesses sold just 18 months ago are changing hands again for 30 per cent more than what was originally paid in some instances. Sheldon says there are distinct signs that this activity will continue as many businesses new to the market are going under offer quickly.......