Pub valuation

megatron33

Hi guys, was after a little help/advice please,
Is there any way to find a valuation or the sale fee on a public house? I've tried Zoopla and the like but am not having much luck...

The reason being is that my wife has her own dance school and is looking for a property of her own to run it from. In an ideal location locally is a pub that has been derelict since 2010. TBH it is a shell of a place that could probably do with knocking down and starting again as the chap who owns it has done nothing with it. My wife made an enquiry about how much he would rent it to her for and his first proposal was too much but believe he is willing to negotiate.

im unsure on whether he would get it up to a standard though befitting of putting a dance school in there or she would be expected to get it ship shape. Being completely out of the know I would hazard a guess that it would cost about 15-20k to get round to rights… is this something that is negotiated between the landlord and contractor?

So excuse the long post but 2 real questions:
Can i find out what the pub was purchased for?
Is the landlord responsible for getting the building to a certain standard - may require structural and definite internal modifications.

thanks all for your assistance!!!

BitterAndTwisted

Have you interrogated the Land Registry site to find out what the property was purchased for?

As to the refurbishment costs: it is common for the incoming tenant to pay for it on a commercial lease.

JQ.

A land registry search will tell you the purchase price. However, that may have absolutley no correlation to what it's worth now or what the current owner will sell it for.

As for the works - that's up to the Landlord and Tenant to agree between them. Commercial leases are totally different to resdiential leases in that it up to the 2 parties to agree all aspects of the lease, which becomes binding. Commercial leases are not to be entered into lightly - an experienced landlord can totally stitch up an in-experienced tenant with a few choice paras. Make sure you understand the full implications of every single word of the lease. If you don't then get advice.

Pub operators would normally be expected to pay for all the fit-out and refurbishment costs themselves. As such if you're expecting the Landlord to spend £20,000 on your behalf then expect to be providing a personal guarantee, potentially with your house on the line and a long lease. Or agree to do the work yourselves.

My advice would be to speak to a local firm of Commercial Chartered Surveyors. Whilst they will likely charge a fee, they should be able to save you many times their fee by negotiating a good deal, as they'll know what it's actually worth.

megatron33

thanks JQ & bitter, exactly what i was after... i just dont want her heart to rule her head and i have literally zero experience in such matters - your advice is much appreciated :beer:

hazyjo

I think pubs are valued on their income. You could have something the size of a shed against some massive gin palace in the same area and the smaller could be more expensive if it takes more money.

Could be wrong, but that's my understanding...

Jx

JQ.

hazyjo wrote: »

I think pubs are valued on their income. You could have something the size of a shed against some massive gin palace in the same area and the smaller could be more expensive if it takes more money.

Could be wrong, but that's my understanding...

Jx

If it was trading, yes it would be valued on throughput - same as a petrol station. But as it's been empty for 3 years, it's likely to be valued on an alternative use basis (subject to planning) - offices, retail (convenience store) or residential.

If you want to get an idea of pub values try :
http://www.fleurets.com/
http://www.christie.com/en

But again, treat the asking prices with caution - some will sell at the asking price others will sell at 50% of the asking price.

megatron33

well it hasnt taken a penny since 2010 when it was closed so it should be pretty cheap then!!!
It was then bought by the gentleman who own the garage opposite - he did this to prevent Tesco from buying it and opening an Express on the site. it has remained boarded up ever since

thelem

Sounds like the sort of person who might be flexible on the rent then.

Commercial landlords often offer a rent-free introductory period, to help you recoop your fit out costs. You may also be expected to return it to its current state at the end of the lease.

martindow

Pubs are in a planning category of their own so you might need to apply for a change of use.

Building_Surveyor

Pub valuations are done completely different to residential valuations - house valuations are done via cost comparison method - i.e look for what similar properties sold for, taking into consideration other factors. Units like this are a completely different ball game so doubt you will have luck searching on the internet - as someone said they are valued via the profits method.

If its own by someone accross the road more than likely he will sell the lease rather than the freehold, charging rent for the lease.

JQ.

Building_Surveyor wrote: »

Pub valuations are done completely different to residential valuations - house valuations are done via cost comparison method - i.e look for what similar properties sold for, taking into consideration other factors. Units like this are a completely different ball game so doubt you will have luck searching on the internet - as someone said they are valued via the profits method.

If its own by someone accross the road more than likely he will sell the lease rather than the freehold, charging rent for the lease.

Nope, a pub that's been vacant for 3 years will not be valued using the profits method. It will be valued on an alternative use basis as stated above, which does use comparable evidence as the basis of valuation.