OPINION: UK c-store values nudge upwards

The value of retail outlets sold by Christie & Co rose by 2.1 per cent in 2010, with the number of transactions it completed up by 24 per cent (excluding its sale of 300 outlets from the failed First Quench off licence chain).

As business agents, Christie & Co do not focus on high street shops so its estimates are a good proxy for owners of c-stores and CTNs, suggesting that prices are firming up again after two years of falls. The company says valuations are supported by the favourable market conditions for independent traders, despite the move of multiple stores into the channel.

Managing director Chris Day is confident that the banks will be supportive of the property sector as a whole. However, for independent operators this is unlikely to translate into easier access to finance.

“The independent shopkeeper is finding it difficult to get funding,” Tony Evans, head of retail, said at the launch of its Business Outlook 2011 document in London this week.

“One experienced operator I was speaking to before Christmas said before 2008 his funding criteria was to drop the bank an email and he would get the OK back by return. Now he has to put together a 50 page support document.

“The funding is there but retailers have to go through more hoops. Many are being asked for extra security and they need to show the value in their business plans.”

In some respects, Mr Evans says that the multiples are getting easier pickings as with their funding in place they are getting first pick of good sites.

Another agent told me a fantastic story of how Christie can add value. He heard that a local retailer was inclined to accept a £450,000 plus offer for the lease of his shop from a major multiple. However, knowing that his valuation would be £850,000 he set up a process where the multiple paid more than £800,000.

While the data Christie provides every year is a bit opaque, the important thing for independent retailers is that they publish it every year and demonstrate a commitment to the convenience sector. Equally encouraging is their confidence in the future for independent local shops.