© The Financial Times Ltd 2014 FT and 'Financial Times' are trademarks of The Financial Times Ltd.
November 26, 2012 12:08 am
A private equity fund is planning to buy venues across the UK as it attempts to reverse the decline of Britain’s regional nightclubs.
EMCO Capital Advisers, a Cayman Island-registered property fund, will from Monday start buying up ailing nightclubs, late-licence bars and beleaguered dance halls stretching from Cornwall to the north of England.
The group plans to try to resuscitate the venues through refurbishment and rebranding, or secure planning permission to redevelop the properties as flats, shops or offices before selling them on.
The launch of the fund underlines the rising propensity of private equity companies to invest in esoteric corners of the property market as returns falter in traditional office and retail property markets.
Emyr Hughes, the 25-year-old co-founder of the fund, said the long-term slowdown in clubbing reflected a flight to quality by discerning partygoers.
“Clubbing is about escapism and people are being a lot savvier these days about how they spend their money to escape from normal life,” said Mr Hughes.
“If you want custom you need to provide something people are prepared to pay for, like getting one of The X Factor contestants to come and do a live act.”
EMCO is planning to invest £5m a month on buying up venues and is looking at Newquay, Penzance and Northampton for target acquisitions.
The fund will avoid investing in, or around, London where high property values and a tough planning system make it hard for turnround investors to profit.
Britain’s nightclubs have struggled during the financial crisis as consumers have sought out thriftier ways to satisfy their entertainment needs. The 18 to 24-year-old customer base, on which nightclubs depend for the bulk of their trade, in particular, has cut back on its revelry.
Rising youth unemployment through the financial crisis has exacerbated a long-running decline precipitated by the 2007 smoking ban, rising alcohol duties and changes to licensing laws allowing pubs to stay open beyond 11pm.
Private equity investors are turning increasingly to alternative property investments, such as student housing, industrial warehouses and car showrooms in an attempt to capture higher returns than those on offer in the core property market.
Copyright The Financial Times Limited 2014. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.
Sign up for email briefings to stay up to date on topics you are interested in