Property market set to be dynamic in 2024
![Industry overview: Christie & Co's Business Outlook report looks at the property market in 2023 and would could be to come in 2024 (image: Getty/pixhook)](https://www.morningadvertiser.co.uk/var/wrbm_gb_hospitality/storage/images/_aliases/wrbm_large/publications/hospitality/morningadvertiser.co.uk/legal/property-law/pub-property-trends-for-2024-from-christie-co/6228527-1-eng-GB/Pub-property-trends-for-2024-from-Christie-Co.jpg)
The Business Outlook 2024 report reflected on market activity, trends and challenges of last year alongside forecasts for 2024.
Predictions for the next 12 months included tenanted pub companies continuing to acquire freeholds up to £1m.
Furthermore, Christie & Co also anticipated there will be limited merger and acquisition activity this year as funding becomes easier and private equity firms return to the market, looking to pick up opportunistic acquisitions of small to large groups.
Other predictions included the possibility of regional and national pub companies looking to rationalise their estate and selling off bottom-end pubs.
In the free-of-tie leasehold market, Christie & Co anticipate this is an area that will remain strong with the cost of debt staying high meaning the higher end freehold market will be less obtainable.
Cost pressures
This year is also set to be the time when cost pressures start to ease while the number of managed pub operations will continue to rise, according to the property adviser.
Looking back on 2023, overall, there was an 8% increase in transactional volumes last year with a rise of 10% in the second half of the year compared to the first, which the property experts expect to mean the market should be more dynamic in the months ahead.
The report outlined key trends that are shaping the market, heading into 2024 including corporate buyers being back in the market.
It indicated independent deals dominated in the first half of last year with private buyers demonstrating a strong appetite for assets valued under £600,000.
While tenanted pub companies are back in the market, making up almost a quarter (23%) of freehold buyers), they are price conscious while the managed house buyer pool is thin at best.
Since the last quarter of 2023, moment has been building in the merger and acquisition market, marked by the bid to acquire City Pub Company by Young’s.
Pub sales
Data revealed more than eight in 10 (86%) of Christie & Co pub sales were sold for continued to use, which the agent said demonstrated long-term outlook investors hold for the sector, despite many headlines relating to pub closures.
Elsewhere, demand for leaseholds remained high thanks to the availability of debt and leaseholds being a cheaper alternative to acquire.
Meanwhile, for operators with accommodation, the pubs with rooms market has remained more robust than expected.
Christie & Co managing director of pubs and restaurants Stephen Owens said: “While there were significant challenges during 2023, the pub sector remained remarkably resilient from a trading and transactional perspective against a backdrop of interest rates and an inflationary environment.
“As we enter 2024, we have begun to see sighs these pressures will ease and our experience from the latter end of 2023 is buyers are beginning to return to the market now we have a more stable environment.”
When it came to prices, the report’s price index showed the average sale price had dropped by 8.1% - this is the largest decline of recent years, even compared with 2020 when there was a 6.4% drop whereas since then, 2021 saw a 3.3% rise and 2022 was 3%.