The value of property in the restaurant sector is rising as consumer confidence returns to the sector according to Christie + Co’s, which has seen average prices rise by 11.1% in 2014.
As the economy recovers there is growth across both the independent and branded sectors, with private vendors accounting for 82% of Christie + Co’s individual restaurant sales this year.
Simon Chaplin, Christie + Co’s director and head of restaurants told M&C Report: “We are encouraged by the private market and the amount of private equity still ploughing in to the sector.
“The London operators with half a dozen sites are moving in to the regions, they’re realising that they might have a model that works in five sites in London but will it work in 10 sites across the country?”
The agent added encouragement is coming from street food vendors starting to take bricks and mortar sites.
“It’s a great way to test something and get a good product. The trends are coming from street food vendors,” Chaplin said adding that BBQ will continue to be a major trend for the coming year.
As the economy improves and more discretionary spend is available, consumers are returning to the restaurant table and not only demanding quality, but also improved diversity and value. This is resulting in opportunities for every type of business to take some of the market share – from street food vendors to casual branded chains.
Looking ahead to 2015, Christie + Co expects to see continued private equity interest in the restaurant sector. It is also likely that there will be potential for consolidation, as operators look to fast-track their expansion or some brands falter.
On the escalating London prices, Chaplin said: “It’s a worldwide bubble so if that bursts London will be affected but the city does not rely on the consumer in the same way as the rest of the UK. The only way it will be affected is if the threat of terrorism impacts tourism in London.
“The demand is still there so the prices will keep going up. We don’t seem to have reached a point where it is no longer sustainable.”
Besides London, he said Manchester is the “second city in the UK” when it comes to food that operators want to secure sites in and Leeds, Brighton, Bristol as well as Bath continue to be the most popular destinations that restaurants want to open in.
