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“Bumper year” for M&A activity in pub sector

Merger and acquisition (M&A) activity in the pub and licenced premises sector reached an all-time high in 2019, new research has revealed.

The study, published by market specialists Fleurets, shows that the sector remains buoyant despite economic and political headwinds.

According to the report, an estimated £8.15 billion was invested in pub transactions in 2019, rising to £10 billion when leisure property investments and brewery transactions are included.

Likewise, the average freehold sale price increased by 19 per cent to £589,262 over the same period.

The report authors suggest that despite concerns over the Pub Code, fears of a staffing shortage, minimum wage rises and increasing purchase and operational costs, the sector continues to attract investors.

“The pub market is not struggling. The significant benefits of asset-backed cash flow have attracted new overseas investors, established investment funds and existing trade buyers. They have all drawn the conclusion that the pub market offers sound investment fundamentals,” said Fleurets.

They added: “There are no signs that M&A activity will stop in 2020.”

In total, the six largest deals – accounting for 7,400 individual pub transactions – were led by major groups Heineken, Young’s, Stonegate, Ei Group, Fullers, and Robinsons.

By comparison, fewer than 600 pubs were sold in the 14 largest deals across the entirety of 2018.

The study also reveals that around 65 per cent of freehold transactions are sold for “continued use”, with the remaining sites most commonly repurposed for residential, restaurant, or retail use.

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John Morgan

John Morgan

Senior Associate – Corporate / Commercial at Mander Hadley Solicitors
A law graduate of Warwick University, I trained and qualified as a solicitor in London in 1977 before spending several years in the Middle East where I acted on major corporate, commercial and banking transactions, many with an international aspect.

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