Christie & Co offers hope for off-trade
Commercial property agent Christie & Co has said the corporate off-licence sector should not be written off – but a convenience rather than specialist model would increasingly become the norm.
Its 2013 Business Outlook report said there were “signs in 2012 of phoenix operators emerging” after the First Quench and old Oddbins collapses.
It added: “Predictions of the death of the corporate off-licence operator may have been a little wide of the mark, even if many of the new operators are morphing into a wider convenience role.”
Despite this, Steve Rodell, Christie & Co’s head of retail, said the prospects of new major multiple players emerging in the off-licence sector remained slim.
“We might have expected to see a number of small companies that came out of the First Quench collapse with one or two stores moving on to buy four, five or six shops, but that’s just not happened,” he said.
“Most have not expanded in the way we thought they would.”
Christie & Co saw a 26.2% rise in the number of sale instructions undertaken in retail in 2012 and a 9.7% increase in actual shop sales.
Average retail sale prices were 0.9% down on 2011, but this was below the overall commercial property market average of a 2.5% drop.
Rodell said: “Average purchase prices in the convenience retail sector held up well despite all the publicity about the demise of the high street.”
Chairman David Rugg said: “Redundancies and severance payments have helped to fuel the bottom rung of the market as cashed-up first-time buyers seek to make investments.”
Rugg said Christie & Co was optimistic for a positive shift in overall prices in 2013.
“Our prediction is that we are at the bottom of the value trough, but with the opportunity to acquire well-priced assets still present,” he added.
“At the same time we are locking into loans with funding costs which are, by historic standards, low.
“Those skilled operators making prudent acquisitions now should fare well across the normal cycle of business ownership.”