Corporate buyers return to pub market in 2023

Tenanted pub companies made up 23% of freehold buyers in 2023, compared with 12% in 2022, according to data from Christie and Co.

Furthermore, Christie and Co’s pub price index dropped 8.1% for 2023 as a result of interest rate hikes and a stubborn inflationary environment during 2023.

Activity was dominated by independent deals during H1 2023, with private buyers exhibiting a strong appetite for assets valued below £600k.

Alongside this, 86% of Christie and Co pub sales were sold for continued use demonstrating long-term outlook investors hold for the sector.

This increased level of activity in the latter half of the year suggests that there could be a more dynamic market in 2024.

Christie and Co predicted that limited M&A activity will take place as funding becomes less difficult and private equity firms return to the market, looking to pick up opportunistic acquisitions.

Furthermore, it expects that regional and national pub companies will look to rationalise their estate and sell off their bottom end pubs.

Overall, Christie expects that the number of managed pub operations will continue to rise.

Stephen Owens, managing director of Pubs and Restaurants at Christie and Co, said: “Whilst there were significant challenges during 2023, the pub sector remained remarkably resilient from a trading and transactional perspective against a backdrop of interest rates rises and an inflationary environment.

“As we enter 2024, we have begun to see signs that these pressures will ease and our experience from the latter end of 2023 is that buyers are beginning to return to the market now that we have a more stable environment.”