Predictably, Hydes brewery have been accused of greed in selling out, but they are after all running a commercial business, not a preservation trust, and one assumes that they have received an offer they can’t refuse from a developer. It isn’t appropriate to draw a comparison with the noble railway arch craft brewers because they don’t have legacy estates of traditional urban pubs that they have to manage.🧵 It’s with a heavy heart that we tell all our @TheJollyAngler regulars, new visitors and visitors still to come that we will be closing after Xmas this year. The building is sold and will not continue to operate as a pub. We are gutted but grateful we have a few more months.— TheJollyAngler (@TheJollyAngler) August 15, 2020
Over the years I’ve been very resistant to automatic knee-jerk opposition to pub closures. It has to be recognised that, for a variety of social and legislative reasons, the overall demand for pubs has greatly reduced in recent decades, and thus the total number that can trade profitably is much lower than it once was. In addition, many pubs have seen their trade dramatically decline due to changes in their local economy that have led to much lower footfall in the area. Many campaigns to save individual pubs are simply exercises in flogging a dead horse.
However, there are reasons beyond the sphere of economics why particular pubs may warrant preservation. One is that they are of such outstanding architectural merit, in terms of either exterior or interior, that they deserve to be kept. We don’t just allow the indiscriminate destruction of all the architectural jewels bequeathed to us by previous generations. This would cover pubs in Manchester such as the Peveril of Peak and the Wellington and Sinclair’s on Shambles Square.
And there are other pubs that, while they may not be so individually distinguished, contribute to the quality of the overall cityscape. Of course Manchester is not a historic showpiece such as York and Chester, but it would be greatly diminished if all its Victorian heritage was lost. There is no suggestion that the Jolly Angler is a failing business, merely that it does not fit into an overall development plan.
Yet it only occupies a small footprint, and surely it would be possible to create a new development around it, and indeed potentially become its centrepiece. Therefore the ball is firmly in the court of Manchester City Council in assessing the planning situation. The Central Manchester branch of CAMRA have started an online petition which is specifically addressed to Sir Richard Leese, the leader of the Council, and has already attracted over 1,000 signatures in just a couple of days. This states:
The Brewery say they have sold the building but we believe no planning application has been submitted to the City Council for demolition or change of use. If and when plans are submitted we believe it would be reasonably easy and the correct thing to do to accommodate the retention of this pub into any new development.It should be remembered that a similar campaign a few years ago was successful in saving the Sir Ralph Abercromby pub near the Town Hall which was also threatened by the wrecking ball as part of a development scheme, so there is still all to play for.
However, it may well be that the Jolly Angler is saved by the bell. One of the most noticeable effects of the Covid crisis has been a severe reduction in economic activity in city centres caused by people working from home. There are many indication that this may prove, at least to some extent, to be a permanent shift in behaviour rather than a temporary adjustment. Therefore it could well turn out that the demand for city-centre office development, and for city-centre living, greatly reduces. After all, while obviously it had many unwelcome economic effects, many pubs were given a stay of execution by the 2008 financial crash.
Deciding whether a pub is a failing business is more than just the trading position. Is it providing an adequate return on capital employed? If your beloved old building is now prime city centre real estate it need to justify its continued existence as a pub.
ReplyDeleteThat means all those of you that value it need to value it with your wallets. You need to accept its £5+ a pint to drink on prime real estate.
Personally I'll be in Timbo's converted office block for a £1.39 pint as I don't give a monkeys about old pubs. But if you do, you need to justify why it should still be a pub by providing the return it could get if used for something else.
In the debate of left V right. captialism v socialism, so little is said about capital allocation. How and why a market of price discovery allocates capital to its most productive use. That's all that's occuring. Make pubs the most productive use of prime real estate. Pay £5+ a pint.
Capital allocation
I thought the article was pointing out that there may need to be a reconsideration of whether there is in fact a more productive use for this site than continuing to operate as a pub?
DeleteAnd how much capital is "employed" in a 19th century building that has been a Hyde's pub forever? The site may be thought of as being "worth" a pile of money, and it may appear in the accounts as such, but if it turns out that "demand for city-centre office development, and for city-centre living, greatly reduces" after this pandemic, it looks like there might be a case for capital re-allocation.
price discovery tells you how much capital is employed. the market price of the land.
Deletethat price alters all the time as per its utility for the many uses it may have.
it may go up. it may go down.
if you you don't want to pay a return on capital employed for valuable real estate, drink in a converted bookies with the camras
But what it's worth depends on what Town Planning - while we still have such a thing - say can be done with the land. So it's absolutely worth those interested making representations.
DeleteIf the planners say that an Asset Of Community Value must stay, then it's worth nothing except as what it is.
But if the owners aren't willing to run it as a pub, then all you're left with is a vacant and decaying building and a protracted staring match. I don't think this applies here, but there are plenty of cases of people being upset about the closure of pubs that realistically are never going to be viable.
DeleteWhat is viable is a business that provides a return on capital employed.
DeleteIf you have a freehold with a market price of £300k in a suburban town like stockport you can likely provide that return selling £3 pints of ale.
If you have a freehold with a market price of £3 million in a city centre of rapid development you might struggle to provide that return unless punters are willing to pay far more than a fiver a pint.
The price of a pint is a payment of rent to sit there a while. Prime real estate costs more than out of town real estate.
Ya'll need to get out of the cheap low rent micropubs and back into the pubs you care about and pay the rent to sit there. That's how you save these places.
Or sit in the Pokey Tap and sign petitions as to what should be allowed on prime real estate. You might win for now and stop this year demolition & development, but the fundamentals ain't changing. That changes when the pub can commercially justify it's use of that real estate.
As to why property prices are high? Central bank printed money pumping the market. Asset price inflation. Been going on decades. The surprise is how slowly it drips to retail price inflation.
I largely agree with Cooking Lager that expensive real estate need to be paid for, and pubs are no exception to this. However, I think what you're missing CL is that pubs and bars are directly responsible for the high land value, and without them, the area is less desirable. Lots of people and businesses want to locate in trendy areas, and what makes them trendy is nearly always their cultural vibrancy.
DeleteTherefore, from a developers point of view, there is a rational economic case to retaining pubs in some developments as a kind of 'loss leader' relative to its theoretical sq.ft. value in order to raise the price of the rest of the development.
What would the value and desirability of land be in a City Centre if it was entirely devoid of pubs, restaurants and bars?
The City Of London being your prime example.
DeleteI have personally witnessed ,in another area,two pubs that were sold with a view to demolition. This was immediately before the financial crash,and when it happened the development stalled and the pubs both operated for another decade,one still going now post covid. However,I can't help but feel the value of the area involved here will hold as will demand,so there's an uphill struggle ahead if the pub is to be saved. Unfortunately, although the pub is a personal great favourite of mine,it is isolated from others, and doesn't have the historical attributes of a Britons Protection etc. Nothing would please me more than to be totally wrong and laughed at in due course though.I have such a high regard for the pub and those running it that I rarely wrote to the Hydes MD about it 24 hours after the announcement- not that my humble opinion will count as much as the harsh economics. Of course in tough times it has to be recognised that Hydes have a responsibility to protect the integrity of it's whole portfolio and estate long term. That said I do hope it can be saved by the bell.
ReplyDeleteDave,
DeleteThe Britons Protection was in the news three months ago with "the business’s owner Mark West" paying "£5,000 rent per week" to the pub's owner Heineken and "At the moment the site is probably costing me £7,000 a week".
A lot of beer needs selling to cover that £364,000 a year and that's before Mark's pays for his beer and staff wages.
And yet substantial town centre pubs elsewhere can be bought freehold for about £200,000
Hi. Yes I'm aware of their issues. Apologies I should have stayed generic and not mentioned the B.P. What I meant to convey was that from a heritage viewpoint only,it is probably less difficult to defend a spectacular heritage pub in a busy flow through centre,rather than a pub that is notable and very good for representing it's type,but a bit further away from a main thoroughfare. Back to your maths-yes that's frightening,especially under the present circumstances.
DeleteThe Prince Of Wales, standing alone near the ICC in Birmingham, as a Victorian remnant, was doing excellent business last time that I looked in.
ReplyDeleteSome further questions to ask yourselves is how and why Munich brewers maintain costly large beer gardens that only trade for part of the year, located in prime expensive bavarian real estate. It's not entirely a commercial market.
ReplyDeleteIf you wanted to remove the commercial reality facing old pubs located on high value real estate, why not do what Mudge bangs on about? A national trust of pubs. Pull your thumbs out, capitalise it with the millions required and start buying these freeholds and charge none commercial rents to the operators.
Come on boomers. You're sitting on fortunes. Put your money where your mouth is.
"Our air-conditioned bars are lined
ReplyDeleteWith washable material,
The stools are steel, the tastes refined,
Hygienic and ethereal.
Hurrah, hurrah, for hearts of oak!
Away with inhititions!
For here's a place to sit and soak
In sanit'ry conditions."
Surely it is a sign of a prosperous and civilised society that it can afford at least a few nice things that don't earn their keep in a narrow financial sense.
ReplyDeleteI believe Betjeman was being sarcastic but I'd rather down pints in the Victoria Inn in Durham than the Spoons across the bus station. Although Spoons have their time and place.
DeleteOn, Betjeman was certainly being sarcastic. The pub that had been replaced was (in a rural context) far more akin to the Jolly Angler:
Delete"The bar inside was papered green,
The settles grained like oak,
The only light was paraffin,
The woodfire used to smoke.
And photographs from far and wide
Were hung around the room:
The hunt, the church, the football side,
And Kitchener of Khartoum."
And it's up to rich boomers to set up and fund the structures to achieve this.
DeleteNational Pubs Trust 1000 members at £100 per year = £100k seed money.
Assume 4 legacies a year of around 100k as rich boomers die and bung you a bunce. Balls to the cats home.
Take that 500k and gear it up in a world on low interest rates on a 10% to 90% ratio
That gives you £5mil a year to buy pub freeholds
Charge below commercial but as much rent as you can whilst keeping the pubs viable. Deduct the nominal interest charges on the geared loans and feed the surplus back into the pot.
Register as a charity to swerve tax on any operating surpluses.
When you get a few pubs and get going send a few tokens out to members for a free cheese salad in a trust pub.
Year by year more crappy old pubs become protected national treasures.
John Betjeman saved the Black Friar from demolition and in Leeds he enjoyed the atmosphere of Whitelock's, describing it as "the Leeds equivalent of Fleet Street's Old Cheshire Cheese and far less self-conscious and does a roaring trade. It is the very heart of Leeds" so he certainly knew a Proper Pub when he was in one.
ReplyDelete