Restaurant property prices have fallen as consumers move away from branded sites, according to Christie & Co.
The property agent’s Business Outlook 2018 reported that prices fell 3.4% in 2017, compared to rises of 14.1% in 2016 and 9.9% in 2015.
It reported a 30% increase in sites sold, albeit at lower prices than had been achieved.
According to Christie & Co head of restaurants Simon Chaplin the market has levelled out and good sites are now available at a more reasonable price.
He added: “We’ve had a lack of good sites coming to the market in recent years, but slowly towards the end of last year we’ve started to see better sites coming to the market. That can be a mixture of things, it can be sites with reasonable rents, or in great locations. Though if you can find a site with reasonable rents in great locations you’re quids in.”
He predicted that “brand fatigue” was likely to kick in with consumers who now want to dine at restaurants and outlets which offer a more individual experience.
“The market is demanding more specialists, especially in the lower end fast casual,” he said. “People, particularly millennials and generation X, are going out more but spending less.
“People aren’t so keen on brands now, there’s less loyalty and they don’t like to be pigeon-holed. They want something unique they can put on Twitter and Instagram.”
Referencing recent restaurant closures, Chaplin said burger restaurants, in particular, might once have been sit down restaurants but are now more grab and go operations.
He said: “People are prepared to spend 25-30 a head on a good night out, but that needs to be a combination of food, drink and atmosphere. The market in the middle – which tends to be the family market – is more likely to suffer.”
Chaplin advised those considering expansion to be patient and wait for the right location that suits their required demographics and footfall.
“There is definitely better value for money to be had,” he said. “The market has reached a level where people are keen to transact.”