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Pub and bar rental values remain in decline

Published:  10 August, 2011

Pub rental values have been taking a hit since the beginning of 2007 and there is no sign of an uplift, according to Fleurets' annual Pub Rental Survey.

Director, of Fleurets, David Sutcliffe says during the 26 years that it has produced the rental survey, it has experienced three official recessions. "However, the current prolonged economic difficulties are arguably the worst we have witnessed during this period."

In traditional pubs around Lonon, the West End show average rents to be up 22% over the last five years, and has the highest level of rental growth and is shown to be well in excess of inflation in comparison to the rest of the country.

It is the only category to enjoy a significant uplift in the past year, at 5.1%.

London city shows a 12% increase over the past five years with negative growth in outer London.

Elsewhere the lowest values continue to be in the north of the country and the highest rental value increase has been in the Midlands at 19.5% over five years.

The highest rentals values for traditional pubs are in the South East, although they are now back to 2007 levels, says the report.

Among high-street bars, values declined in the West End, in the City and in outer London, while rising in the north, in the Midlands, the south-east, the south-west and Wales.

Sutcliffe says it has seen most of the pub companies disposing of their bottom end properties and high street bar operators consolidating or acquiring already fitted out bars.

A number of companies have continued to expand, he adds, including Inventive Leisure with their Revolution and newer Revolucion de Cuba brands, as well as smaller operators such as Loungers, Anglian Country Inns and new entrants No Saints.

"We continue to believe that rent review activity will remain relatively quiet for the foreseeable future.

"We are starting to see some positive results coming out of the managed house
operators with J D Wetherspoon, Mitchells & Butlers and Inventive Leisure posting positive results.

"Once this filters through into the property market we may start seeing an uplift in rental values, though this may be some time away."