Business intelligence group Christie + Co’s Business Outlook Summer 2012 publication reveals that hospitality markets have learned to operate in a “new normal” during the first half of 2012.
Simon Hughes, Christie + Co’s managing director, said: “The ongoing crisis in the Eurozone and the fears of a double-dip recession in the UK didn’t inspire great confidence as the year took shape. However, while transitional activity has been of a steady variety, we are buoyed somewhat by indications of a possible return to debt funding.
“One thing that is clear is that the market is still functioning as operators have learned to adapt to what is a ‘new normal’.
“Potential investors have been boosted by the availability of a number of lending vehicles — both returning and new. The Government’s National Loan Guarantee Scheme should stimulate the wholesale money market, improve liquidity and ease some of the capital allocation issues the banks have been facing. Meanwhile, there have been some encouraging recent signs that some of our lending institutions, including those that remain part-state-owned, are coming back to the sectors in which we operate.”
Christie + Co’s sister company Christie Finance, a commercial finance broker, recently announced a £70 million tranche of available funding for the healthcare, hospitality and retail sectors.
Director and head of market valuations at Christie + Co, Darren Bond, remarked that he expected banks and operators to be “more proactive with their strategy for restructuring outstanding loans” in the second half of 2012; welcome news for people across a number of sectors whose trading outlook remains opaque for the time being.
The hotels sector witnessed reasonable activity in the first half of the year as banks come to terms with their positioning and exposure in the sector. Predictions earlier in the year that the market would be dominated by cash-buyers has been proven somewhat, most notably in Topland Group’s acquisition of von Essen Hotels’ Cliveden House in March.
Despite like-for-like sales in the restaurant sector falling in the first quarter, many examples of the trend were bucked; with an array of restaurant groups such as La Tasca and Las Iguanas, announcing plans to return to the acquisition trail.