JLL Hotels & Hospitality Group has undertaken its inaugural Pubs Investor Sentiment Survey, the first of its kind in Australia, with the results now published.
JLL Hotels & Hospitality Group has released the findings of its 2024 Pubs Investor Sentiment Survey, the first of its kind carried out within the industry. The initiative uncovered compelling insights on investment sentiment, gathered from some of the nation’s most prolific publicans.
The survey gathered insights on aspects such as current trading performance, key operational challenges, current appetite market appetite and importantly, their view of the future, as consumer behaviour continues to evolve.
“2024 has certainly been one of the more dynamic years witnessed within our industry, with the nation’s publicans charting their course through economic pressures, fuelling the need to implement new strategies to sustain their business,” stated JLL Hotels executive director Ben McDonald.
“We took the view that now is a better time than ever to conduct this initiative, and we look forward to continuing our annual surveys into the future to provide our market the opportunity to be heard.”
Investment appetite increases amid varied trading conditions
In findings concurrent with the recent uplift in market movement, the survey revealed that two-thirds of the respondents expressed interest in purchasing a pub asset within the next 18 months. However, 83 per cent of respondents cited finding the right opportunity was highlighted as the biggest hurdle in securing new acquisitions.
Conversely, only 19 per cent of respondents showed interest in selling a pub in the next 18 months, with over half (53 per cent) feeling neutral about selling. Those that are, are largely doing so as a form of capital recycling (25 per cent).
“We are certainly seeing deal flow and transaction momentum building in the market as we head towards the final months of the year. In the last 8 weeks our national team has sold close to $300m of assets which shines a light on the ‘dry power’ which has been sitting on the sidelines,” stated McDonald.
“We’re seeing publicans and investors with renewed confidence in the sector due in part to increased comfort around the legislative environment – a big inhibitor of transactions unfolding over the last 18 months. There is currently more capital demand for pubs which is a nice endorsement for the industry and bodes well for owners contemplating divestment options.
McDonald shared advice for any prosepective buyers looking to acquire a pub in the next 18 months.
“Buyers should prepare early in anticipation of opportunities being presented, given the speed of a transaction can often be a determining factor in either securing an asset or not.”
In terms of current trade, the survey findings showed a broad spectrum of trading performance across the industry, with F&B largely underperforming, while gaming was still going strong. Almost two-thirds of respondents (64 per cent) said their pub or portfolio was trading in line with budget expectations or exceeding them.
Almost all respondents (97 per cent) found the rising costs of doing business to be the biggest challenge facing profitability currently, however there was a cautious sense of optimism for the remainder of 2024, with more positive optimism for 2025. Technology upgrades and MEP improvements were cited as key focus areas for investment.
Comprehensive findings on the JLL’s 2024 ‘Pubs Investor Sentiment Survey’ can be requested by contacting a member of the JLL Hotel & Hospitality Group’s national pubs team.