Licensed trade sector cheered by 'lifestyle' sales boom

Buyers escaping the rat race have been a tonic for country inn prices

Extract from Commercial Report, Jim Dow, The Scotsman, 9 September 2003

The property market has had its ups and downs in recent years but as far as the licensed trade, hotel, guest houses and hospitality sector is concerned, business has been going in only one direction - up and up.

There are not enough properties on the market to meet the demand, prices are going up and, more and more often, closing dates are being set which has not been the norm.

Derek Burgoyne, of Bruce & Co, has one word for the state of the market: “Fantastic.” He said: “It is as busy as ever. There are more buyers than sellers and about 80 per cent of them are from outwith Scotland.

“Perthshire has always been the most popular as well as north-east Fife. South-west Scotland has recovered from the effects of foot-and-mouth and is becoming more popular.

“More and more properties are going to a closing date and prices are in advance of the upset price.........."

......Burgoyne thinks there has been an influence from the number of television programmes about a change of lifestyle. People are fed up with two hours of commuting and working hard and want to run a country hotel or inn in Scotland. However, Ailstair Letham, of Robert Barry, said people are going into their new life with their eyes wide open. “The lifestyle buyer is active but there is a difference these days - they know what they are letting themselves in for in terms of business reality.”

The market is still strong with demand across the board, but concentrated on country hotels, country inns and country house hotels. “People out there are wanting to buy and are getting frustrated at not finding what they want. Good prices are being paid. We are often seeing prices above the asking price. There is a shortage of property, but we are out and about getting new stuff and it will be on the market in the next three or four weeks,” said Letham. ......

....... Graeme Smith, of Christie & Co in Glasgow, says that the hotel and guest house market is exceeding all expectations. Rural hotels and guest houses are generating huge amounts of interest resulting, in some instances, in an accepted sale price of 20 per cent over the asking price.

He added: “Many of these businesses are not necessarily money-making machines but they do offer the purchasers a lifestyle that they may not currently be achieving under their present circumstances. With many looking to escape the rat race, the purchase of a guest-house or hotel set within rolling countryside and on the shores of either a loch or river is extremely appealing.

“With increasing competition to buy businesses in these present market conditions many buyers are reverting to retaining agents like ourselves to acquire specific properties, which were not previously on the market. This enables buyers to possibly acquire a property in an off-market deal.”

Christie says there is still a strong demand for pubs from local and national pub companies who are continuing to expand their tenanted estates - although some are not as aggressive as they once were.

Some buyers are now looking at a range of properties that, perhaps due to mismanagement or neglect, are in poor condition. The buyers then invest heavily in refurbishment and re-launch the business, rather than persist in looking for the 200-barrel-plus public houses, which are not as readily available.

Christie adds that in the guest house and provincial hotel market businesses are virtually “walking out the door”, primarily to cash-positive buyers from south of the Border.......