Low rents but region’s pubs still closing

The Pub Rental Survey 2011, by quantity surveyor Fleurets, found that the average rent for pubs in the North, including Yorkshire, was £39,442 following a 4.8 per cent decline over the past five years.

The annual survey covers over 1,000 traditional pubs and high street bars across the UK, including 268 in the North of England.

The survey said that pub rents are still being hit by the economic decline that began in 2007 and it is difficult to predict when an uplift may occur.

It points to rents being flat or in decline in most UK regions in 2010 compared to 2009. The traditional pub sector in London’s West End is the only category to experience an increase in the past year, up 5.1 per cent.

By contrast, high street bars in the North have the highest rents across all four UK regions outside London after rising by 5.5 per cent over the last five years to £111,443 compared to the lowest rents in the South East at £102,601.

The report said: “We continue to work in an environment that remains relatively quiet. Many of the major companies are focusing on rationalising their estates. We have witnessed most of the pub companies disposing of their bottom end properties. In addition, high street bar operators are consolidating or acquiring already fitted out units, rather than acquiring new shell premises.”

David Sutcliffe, a director at Fleurets and author of the report, said the number of freehold properties on the market meant people were increasingly buying pubs rather than renting them.

“If people can get the finance, it’s cheaper to get a freehold and get a mortgage rather than rent,” he said. “That has happened over the last two or three years as pub companies, such as Enterprise Inns, Punch Taverns and Admiral Taverns, have tried to sell property to pay off their debts. With all these pubs coming to the market there is an oversupply.

“We have seen a strong northern bias to this disposal in old industrial areas where a lot of that industrial infrastructure has disappeared. A lot of the properties we are selling have closed down and are bordered up, which wouldn’t have happened five years ago.”

Simon Hall, head of pubs based in the Leeds office of Fleurets, added: “There is a higher density of pubs in urban areas such as Huddersfield, Bradford, Leeds, Hull, Barnsley and Sheffield where historically there were manufacturing and coal mining industries to create the demand. The way pub companies have been structured and financed over the last 15-20 years has paid for these pubs to stay open. However, that has changed since the recession and many pubs haven’t been able to stand on their own feet because the market isn’t there any more.”

Another recent trend is that half the pubs on the market are now sold for alternative uses such as residential, retail, care homes and offices rather than as pubs. The former Falcon pub on Salterhebble Hill in Halifax was even turned into a funeral home last year.

Mr Hall said: “The number of pubs being sold for alternative uses has gone up in recent years and we expect the figure to be about the same this year. I predict that next year the number will be lower as more pubs stay as pubs. Pub companies over the last few years have sold the worst of the pubs and what is coming to the market now is better quality.”

However, discount bar operators such as Wetherspoons, Bravo Inns and Amber Taverns are bucking the trend and buying up properties for expansion.

Wetherspoons the group, which has 54 pubs in Yorkshire, has opened new pubs in Leeds city centre, Otley, Ripon and Pudsey over the last 12 months. Earlier this year, it said it has identified further sites in Sheffield, Leeds, Wakefield, Withernsea, Garforth, Todmorden, York, Beverley, Hull, Armley, Halifax, Selby, Ilkley and Whitby.

New operators for seaside bar

A BAR at the heart of Bridlington seafront has been taken over by a new operator.

Jeromes Cafe & Pavilion bar, which has been developed by businessman Michael Harrison over the last 23 years, has been sold to Wallbrook Leisure, a joint venture between entrepreneur Tony Walsh and Kevin Brook, who has worked for a number of national operators. Mr Harrison said: “It will be strange to see it in somebody else’s control, but I know we have selected some very good operators.”