The average cost of a restaurant in the UK is £374,000 according to Estates Gazette.

EG Radius states the average cost to purchase a restaurant in the UK has increased 6% to £374,000. The leading commercial real estate data provider shows an average cost per square foot for a restaurant in the UK has topped £400.

Restaurant Property in the UK

Several key factors have contributed to the rising value of restaurant properties:

Post-Pandemic Recovery – As the hospitality sector recovers from COVID-19, many restaurant operators are expanding or upgrading their premises. Consumer confidence has returned, and dining out remains a strong cultural habit in the UK, driving demand for quality spaces.

Limited Supply, High Demand – Prime restaurant locations, particularly in major cities like London, Manchester, and Birmingham, are in short supply. This scarcity has pushed prices up, with competition fierce for well-located properties.

Inflation & Construction Costs – Rising construction costs and material shortages have made new restaurant developments more expensive, leading investors to focus on existing properties, further inflating prices.

Investor Interest in Hospitality – Commercial real estate investors continue to see hospitality venues as a lucrative asset class, leading to higher purchase prices, especially in sought-after areas.

Regional Differences

While London remains the most expensive restaurant property market, other cities are seeing rapid price growth as well. Some key trends include:

London – Prime restaurant sites in central locations like Soho, Mayfair, and Shoreditch can fetch well over £1 million due to their footfall and prestige.

Manchester & Birmingham – Strong demand from independent and chain restaurants has driven prices up, with key areas like Spinningfields (Manchester) and the Colmore District (Birmingham) seeing significant investment.

Coastal Towns – Tourist hotspots such as Brighton and Bournemouth are experiencing rising restaurant property values as staycations remain popular.

What This Means for the Market

For prospective buyers, the rising costs mean greater competition and the need for careful financial planning. However, for existing property owners and landlords, the increase presents an opportunity to capitalise on a strong market. Lease agreements are also being renegotiated at higher rates, benefiting landlords but posing challenges for restaurateurs facing higher operational costs.

Final Thoughts

The restaurant property sector in the UK is experiencing a strong upswing, reflecting the resilience and ongoing evolution of the hospitality industry. While rising prices pose challenges, they also signal confidence in the market’s long-term prospects, making restaurant properties a valuable asset for investors and business owners alike.