Pub operators can look forward to a period of increasing confidence entering 2018, according to the latest report by specialist property adviser, Christie & Co.

In its Business Outlook 2018 report, Christie & Co identifies the sectors that benefitted from activity fuelled, in part, by the availability of finance and a surge of investors, many from outside the UK, looking for good opportunities and strong returns.

The continued uncertainty surrounding Brexit has made its impact across all sectors - including Pub, Restaurants and Hotels - but the UK has also welcomed a spike in tourism and a surge of foreign capital into the UK market. Asian investors particularly view the UK as an attractive investment opportunity thanks to the country’s stability and relatively low value of the Pound.

The report expects further consolidation as pressures on costs continue, but this will prompt a shift towards embracing change, as technology and innovation evolve alongside the UK’s strengthening economy.

Average prices remained economically positive throughout 2017 across almost every sector in which Christie & Co specialises, including the following: Pub prices rose by 3.8%, and Restaurants by 3.4%.

Neil Morgan, Managing Director – Pubs & Restaurants at Christie & Co commented, “The pubs market in 2017 was tough with the introduction of new or increased operational and financial pressures, such as the Apprenticeship Levy, and exacerbated by increases in the National Living Wage and business rates.

'Similar pressures will be felt throughout this year, but the sector is proving itself to be extremely resilient as operators turn towards innovation to improve management and customer service. New avenues of profitability, such as microbrewing and the addition of accommodation have been shown to significantly improve margins.

“While some business failures are likely as we leave the peak of the cycle, 2018 will see increasing competition for sites as pub values continue to rise. Demand will stem from the growing interest of private equity and trade buyers, as well as operators and investors seeking opportunities in underinvested marginal assets and portfolios. Resurgence in demand for tenanted assets could drive excellent value growth.”

Chris Day, Global Managing Director at Christie & Co, commented, “We are seeing the signs of increasing confidence and economic positivity in almost every sector in which we operate and pipelines continue to grow by double digits as we enter 2018.

“Whilst higher inflation and sluggish wage growth are squeezing consumer spending and acting as a drag on the speed of UK growth, and a lack of clarity around Brexit is hampering some investment, but there are positives. Unemployment is at its lowest rate since 1975, inflation remains low, interest rates are stable and manufacturing growth is strengthening. In short, the economy is recovering and there is still plenty of room for growth.

“Within Christie & Co, we are embracing change and bolstering our team at home and internationally to capitalise on our expertise to attract and support both new and well-established clients who need help navigating the market, and who want to ensure a high-performing business.”

(source: Christie & Co, image: www.pexels.com)