Investors remain interested in the leisure and licensed sector but are still cautious, reflected by the marginal outward shift in yields, even for stronger covenants in prime locations, according to Colliers International’s latest Specialist Snapshot. The research found that the licensed and leisure industry is performing well in certain sectors, particularly in Central London and that demand for well-let leisure schemes remained good. It found that despite the impact of reduced discretionary spend upon the “special sectors”, many operators are beginning to see positive results as they focus on restructuring and their core businesses. It said that London hotels have recovered from the recession, while the provinces have improved slowly. The report found that well-financed budget chains “continue to grab more market share as independents dwindle”, while investor appetite remains strong. The snapshot also found that there had been an increased interest from mainstream and boutique funds in parks, marinas and leisure facilities during the year as looked to diversify investment portfolios and acquire alternative assets. However, it said that the private market remains slow, being heavily reliant upon house sale equity and bank funding. Dr. Walter Boettcher, director, Research and Forecasting at Colliers International, said: “There is also evidence that bank funding is available for operators with strong balance sheets and proven management. Boutique funds increased their interest in certain sectors for diversification purposes. “The Q3 GDP figures came in slightly above expectations but are still weak in terms of overall growth. The Eurozone debt crisis continues to stoke volatile markets, which is stimulating job security concerns as businesses are cautious in their investments. Government spending cuts continue to have an effect as the private sector hiring has yet to offset the public sector redundancies.”

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