Property watch

There are still more businesses wanting to buy than to sell in the pub and restaurant market. There are plenty of cash sales, but there is an increasing occurrence of "paper" mergers and takeovers.

These mergers and takeovers may be why there are fewer opportunities to buy than there were this time last year.

We are seeing in central London the first effects of Westminster City Council's measures to restrict planning consents for pubs and restaurants. The council is also working with the police to restrict opening hours for licensed premises, especially nightclubs, with new licences restricted to a 1am limit and some midnight.

The knock-on effect of such restrictions will be interesting to observe, as will the appeal process in fighting these measures. It will also be fascinating to ascertain whether such policies spread elsewhere in the UK.

Although new operators are coming into the market constantly, others are expanding, with new chains opening restaurants and pubs all the time. The market is in a state of flux with some high rental and premium values, but with the pressure of more restrictive and cautious funding. The price-to-earnings ratio for restaurants on the Stock Exchange is often dramatically down on last year. The consensus is that this is a short-term position and that share prices will begin to rise after the summer.

This is an unusually mixed market with vigorous buying and selling but pessimism in some quarters.