While the economy is stronger than it was at the last General Election, selling your business in London will still be a challenge. Here, we provide expert analysis of some of the factors that will influence the sale.
A stronger UK economy
Timing is one of the most important factors when you’re looking at selling your business. The economy is recovering at a relatively strong pace, and while the national debt is still rising, the deficit is falling.
This is proving to the international money markets that the UK is strengthening its financial positioning, and as the world’s 6th strongest economy, many are turning to the UK market for investment opportunities. International operators are focusing in on UK restaurant property.
We have just learnt that US “better burger” operator Smashburger is set to open 35 units across the UK – a perfect example of the sort of international attention the UK restaurant scene is under. This is good news if you are selling your business in London.
Attract ‘budget’ brands
According to research by Allegra, the move towards “premiumised informality” has been one of the main trends across the restaurant scene in London and the wider UK in recent years.
With budget restaurants, pop-ups and cooperatives like Brixton’s Boqueria, Soho’s Brasserie Zedel, and Mayfair’s Hakkasan all featuring in lists of London’s most popular eateries, you may want to point your properties at these great new prospects.
Across the hospitality sector…
The Hilton London Hyde Park has recently announced the opening of the 10th Aubaine French restaurant in its ground floor this summer, demonstrating how new hotels provide new opportunities for restaurateurs.
With a firm economic base, operators are taking the time to invest in London and regional property for their hotels, generating excellent sales potential. According to a BDO report, the majority of the brands purchasing property in the leisure space are ‘budget’. The report cites brands like CitizenM, hub by Premier inn, Tune and the Qbic hotels as growth generators in the sector.
Some impressive statistics from the report are that budget brands will make up 47% of new hotel developments over the next three years. In 2015 alone, Travelodge plans to open 15 new hotels, and has identified the potential for an additional 250 sites.
“Green” is mainstream
Operators looking to buy your business are now concerned about the green agenda, as their customers are now becoming more ecologically engaged.
Animal pop-ups in London have become a staple of the restaurant scene, and the trend is set to flourish, with 5 more animal cafes set to open in the coming year, eco-themed restaurants like Grain Store succeeding, and even a 2-day dog pop-up kitchen being popular in Shoreditch.
As an example, according to a report by Trip Advisor, 44% of European travellers feel that hotels don’t currently provide enough information regarding their environmental policies.
However, as some commentators have suggested, it’s vital that if you’re selling your restaurant in London, you appreciate that there has to be a sensible balance between providing potential buyers with the green case for your business, as well as the profit incentive. Nobody will purchase your business if you don’t explain its financial case.
The outcome of the General Election
The General Election on May 7th will determine the future direction of the economy, jobs market and general prosperity level of the country. It’s clear that it will be extremely challenging for either the Conservatives or Labour to gain a majority.
One thing is clear, however: Leaving the EU – the single market that enables the growth of the restaurant and leisure sector with its 2.7m person workforce – would make selling your restaurant more challenging because of a decreased workforce and decreased global customer base.
If you’re selling your business in London, the factors above will play a significant part in how difficult the sale process is. For professional, expert advice, speak with one of our experienced advisors.< Back