The nightclub sector is mostly comprised of independently-owned or smaller multiple operators, with a limited amount of corporate ownership. Nightclubs can be subdivided into a number of categories:
- super clubs;
- mid-sized clubs;
- small clubs; and
- chameleon clubs.
In recent years the nightclub sector has not only been adversely affected by the changes in the licensing regime but has also suffered as a result of changing social trends.
Licensed premises, including nightclubs, are generally bought and sold by reference to their trading potential as the motive of the operator and purchaser is to trade from the premises to realise its profit potential. Consequently, valuers compare and value premises on a trading/profit-related basis.
Related RICS standards and guidance: Red Book VPGA 4 Valuation of individual trade related properties
Related template: Nightclub valuation checklist
Related feature: Valuing trading potential