Christie & Co report points to falling pub closures

Average pub property prices remained broadly stable in 2011 but more of the pubs sold stayed as pubs, according to property agent Christie & Co.

In its Business Outlook 2012, Christie & Co indicated that the rate of closures was slowing. Some 64% of pubs sold remained as pubs during the year, compared with 60% in 2010.

Neil Morgan, head of pubs at Christie & Co, said: "Though clouded by the general economic malaise, 2011 has given the pub sector grounds for optimism, with average prices holding up and increasing numbers of pubs staying as pubs after being sold. Moreover, of those pubs that do close, we are reassured by a growing number that are retained for some leisure use, such as restaurants.

"However, the pub market is still over-supplied and we need to lose a further 2,500-3,000 over the next few years if we are to achieve a truly sustainable and vibrant pub marketplace, offering choice and better quality for consumers."

Morgan added: "This is symptomatic of an exciting sector for which there is increasing and returning appetite from some entrepreneurs who had left the sector previously when times became hard.

"However, Funding remains a big question. Traditional high-street lenders have their own damning experiences with "toxic" property, so it is not surprising that they remain somewhat cautious about investment in the public house sector. But with the Project Merlin cash especially aimed at smaller businesses and optimistic noises from some new lenders, we can hope that it will inspire a renewed vigour and vitality in the sector."

Christie & Co's predictions for the pub sector in 2012:

● Banks will release further assets to the market
● Over 2,000 pubs will be sold by the pub companies
● Managed public house stock will continue to be in high demand
● The late-night sector will remain extremely challenging
● The freehouse sector will grow by at least 1,000
● There will be continued private equity interest in the managed house sector and emerging interest in the tenanted sector

By Neil Gerrard

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