A leading property adviser has said that the UK’s nightclub sector faces “more of the same” over the next 12 months, including the odd regional pre-pack administration and price sensitivity at the trading level.
Speaking on the back of Christie + Co Business Outlook 2015 launch, head of leisure & development Jon Patrick said there will also continue to be “medium term P&L gains for those who have invested and achieved sustainable trading uplifts which have delivered real profitability”.
He said: “One of the challenges the sector faces is that the returns on investments need to be made quickly as the fickle nature of the late night industry means fashions can also change rapidly and wear and tear on FF&E means constant maintenance is key.
“So a 40-50% ROI would be what operators will be looking for to justify investment spend.
“When Luminar was sold, it was clear there had been significant under investment in the portfolio. At the time this wasn’t a huge problem as with the pressure on the sector, competitors weren’t necessarily investing either. As time went by, the capex time bomb became both an issue and for some and an opportunity, particularly for those, such as Luminar who occupied the best space in the sector.
“The sector has continued under pressure, but there have been wins to be made for those with the willingness and ability to invest in assets worthy of receiving expenditure.”
