The Valuation of Licensed and Leisure Properties

It was the debacle over valuations of Queens Moat Hotels in the early 90’s that lead to the wholesale rewriting of Valuation Manuals & the content of Valuation Reports. Nevertheless, valuation methods are largely unchanged. The value of licensed and leisure premises is inextricably linked to trading performance and potential. Purchasers are buying into earnings potential and will pay a price based on their perception of the profitability and potential of the property.

It is a task of Valuers to follow the market and not to make it. To interpret market evidence, valuers rely upon an assessment of the fair maintainable net profit taking into account aspects of the property including the cost of maintenance and any development potential. The lack of trading and accounts information makes the interpretation of evidence provided by comparable transactions very difficult. Looking at a factory, the sale price is analysed by reference to the specification and size of the building. With a public house, the transaction is analysed by reference to the EBITDA (earnings before income tax, depreciation and amortisation).

It is for this reason that licensed and leisure property valuations can only be undertaken by those who are regularly engaged in this market sector. Underwoods Chartered Surveyors have specialised in the valuation and sale of licensed and leisure property for over 20 years and regularly deal with rent reviews and rating appeals.

Further information can be obtained from Andrew Boulter of Underwoods (01604 404060 or ab@underwoods.co.uk)

Robert Keeves

01604 774143

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The Valuation of Licensed and Leisure Properties

It was the debacle over valuations of Queens Moat Hotels in the early 90’s that lead to the wholesale rewriting of Valuation Manuals & the content of Valuation Reports. Nevertheless, valuation methods are largely unchanged. The value of licensed and leisure premises is inextricably linked to trading performance and potential. Purchasers are buying into earnings […]