Dozens of JD Wetherspoon pubs put up for sale in recent months have yet to find buyers as nervousness about the impact of the cost-of-living crisis on the hospitality sector and turmoil in the commercial property market have put off potential suitors.
Wetherspoons announced the sale of 32 of its 800-plus premises in September as part of a long-term strategy to overhaul its estate, just days after former prime minister Liz Truss’ mini-budget led to a sharp rise in mortgage rates, sending shockwaves through. property market.
Of the 32 pubs advertised for sale at the time – 10 of which are freeholds and the rest leaseholds – 27 places have yet to find a buyer. Wetherspoons has since put a few more places on the market, bringing the total up for sale to 35 places.
Wetherspoons chief executive Tim Martin admitted the sale – the biggest in the new pub chain’s history – had been affected by worsening economic conditions.
“Will we be better in 2018? Yes, maybe,” said Martin. “Some [of the sales] slow but overall they are moving at a reasonable pace. It’s definitely a bit slower than in the middle of the property boom but we’ve sold a lot of pubs.
The company has earned almost £3 million for the 10 pubs it has sold since July, most of which it has uploaded to other rivals.
“It’s not a time when the taxpayer wants to buy, refurbish and open more pubs with all the costs of running them and the uncertain market conditions,” said a competitor, which is looking at a number of Wetherspoons sites in London. The sale process is being monitored by real estate companies Savills and CBRE.
Wetherspoons said in a trading update on Wednesday that sales were 17.8 per cent higher in the 12 weeks to January 22 than the same period a year ago, but 2 per cent down on pre-pandemic levels. The group’s London-listed share price fell 5.5 per cent to £4.50 in afternoon trade.
Martin insisted the sale of the pub was not part of an effort to raise money to ease cash flow or pay off Wetherspoons’ £745 million debt, and was part of the “normal disposal” of the venue. “The ones we have sold are usually within a mile of other pubs,” he said.
An agent close to the sale process said the disposal of the pub was “difficult” due to concerns about a consumer slump affecting pub sales and banks’ wariness of lending, but insisted “buyers are still coming in for the property”.
“I really think the marketing has gone very well so far because of what you hear about the market,” he said, adding that freehold sales can usually take up to six months.
“Enough [the venues advertised] is a pub where the lease is coming to an end and we’ve put it on the market to see if anyone wants it,” added Martin.