Pubs cashing in on a staycation revolution
Covid was a potential disaster for pubs – but it may also have given them an unexpected boost.
An expert today revealed how the coronavirus crisis has given the British public a new-found appreciation for what is on their doorstep.
A big rise in staycations, and the increased willingness to get out and enjoy the local, has given the industry a fillip just when it needs it.
A specialist advisor for business properties says there has been a marked increased interest in pubs.
The regional market is proving "resilient" according to Christie & Co, who are specialist advisors for buying and selling businesses, with buyers looking for opportunities in both cities and towns and in rural areas.
It says the boom in staycations has made pubs and restaurants more attractive to buyers and investors, particularly in holiday beauty spots in Shropshire and Staffordshire
Christie & Co found that last year the commercial property market returned towards pre-pandemic levels.
Regionally there was a was a positive trend in demand for pubs, but 2021 was tougher for the restaurant sector, which was hard hit during the pandemic, with many closures.
Associate director for hospitality Charles Jones said 2020 had been a challenging year for restaurants and pubs, but that there was some light at the end of the tunnel.
While town and city centres remain a challenge as more people work from home, clients with out-of-town venues did very well as customers searched for a venue for a day out or a short break.
Mr Jones said: "We have found 2021 to be more of a buoyant year, with prices increasing 3.3 per cent for pubs, and demand outstripping supply
"Across hospitality there were still buyers there."
He said the staycation boom had helped the market on the west side of the conurbation, towards the open space of South Staffordshire and Shropshire, and more positivity was expected to come through in 2022, with people out and about more in the region.
Mr Jones said there had not been the wave of pub closures in the Midlands that had been expected in the aftermath of the pandemic.
There was an increasing interest in buying pubs from both independents looking at single sites and bigger operators coming back into the market and trying to find new opportunities.
Pubs that had outside space were top of the list of what buyers were looking for, and owners were adding patios, decking and side extensions.
Mr Jones said that pubs were still very important to the communities where they were located, adding: "Of the 340 hospitality businesses Christie & Co completed on in 2021, 87 per cent of pubs that were purchased were remaining as pubs, with 47 per cent sold to private buyers."
He said he expected there to be a shift back to interest in city centre sites as footfall increased with people returning to offices. There has been a resurgence in trade since Plan B measures were relaxed and businesses are also evolving in order to take advantage of changing trends.
Mr Jones added: "Restaurants have evolved their business model and buyers are looking at sites that can offer takeaway and grab-and-go. Takeaway property sales were up 30 per cent last year
"In the West Midlands demand is outstripping supply. When a site comes on the market you are getting multiple interest," he said.
Mr Jones said he expected staycations to continue to be a factor in 2022.
Areas that were seeing a strong flow of holidaymakers, such as Ironbridge in Shropshire and other parts of the River Severn corridor, were likely to benefit. Buyers were looking for restaurants and pubs with locations close to rivers and with plenty of outdoor space and car parking.
Christie & Co says that another of its specialities, the care home sector, has also shown remarkable resilience.
While pubs have suffered through enforced closures in lockdown, care homes had to remain operating but under the most difficult of circumstances.
Regional director for healthcare, Lee Howard, said the healthcare market was in good shape despite the continuing pandemic last year
"It was the year from hell in 2020 when care operators were hit with the surprise of Covid," he said.
"In the West Midlands operators soon got to grips with handling the situation and in 2021 were more prepared."
Mr Howard said there was increasing demand for care homes, particularly in the Midlands
Operators were confident again to buy care homes and to build on to existing portfolios
He said Christie & Co had particular success in Staffordshire.
Overall there was an average increase of 5.4 per cent in care home pries due to lack of stock on the market with at least one or two buyers for each home that came on the market
"Demand almost outstripped supply and at the end of 2020 I wouldn't have predicted that. The care operators were almost in a sink or swim situation and thank goodness they managed to swim," added Mr Howard.
There was increased demand for converting outdated care home assets including reconfiguring, extending or refurbishing
An issue in 2022 is that because the West Midlands is highly built up there is not a large amount of land available for new development
Mr Howard said this was a trend he expected to continue through 2022, with the Christie & Co land and development team expected to be extremely busy in identifying potential sites.
He said the childcare market had seen a recovery last year and the dental and pharmacy markets had experienced no problems.
All sectors had a better than expected 2021 and all the indicators were that that would continue through 2022.
Mr Howard said the office market has had a major blip during the pandemic and now most businesses are assessing their long-term needs.
He said the market would evolve over the next three years as hybrid working continued to have an impact.
"It was always going to happen but the pandemic has accelerated this," he said.
