What Is Your Gastro Property Worth?

Conduct the Valuation Analysis

You want to sell a restaurant but don't know how much your hospitality property is worth? Several factors - both hard and soft - are decisive. We'll tell you about serious approaches to valuing your property.

The concept influences the price. The motives for selling an operation are diverse: age-related closure, inheritance, illness, change of direction, environmental influences – or recently the effects of the Corona pandemic are just a few examples. When the time comes, the seller must know what their restaurant, hotel or other gastro property is worth. Those who have unrealistically high price expectations from the start will lose out. Those who set the selling price for their gastro property too low will also lose out.

But how do you determine the right selling price? Hard criteria are used for assessment, which are transparent, comprehensible and plausible. In addition, soft factors such as history naturally also play a role.

Valuing Gastro Properties Correctly

Tip: Follow the methods used by gastro experts, gastro brokers and banks for property financing to determine the value of a gastro property. These are based on professional schemes that have proven themselves in the industry when a restaurant, bar or pub is sold.

Prudence pays off. The biggest mistake: Your own perspective. There are different ways to approach a property sale. When valuing, by no means only consider your own viewpoint. It is not decisive what desired value you have in mind for the sale of the restaurant, hotel, café, etc.; rather, what the gastro property is actually worth – and what it is worth to potential buyers. That's where you should start.

The Biggest Mistake: Your Own Perspective

When analyzing all aspects of your gastro property valuation, be sure to also consider the buyer's perspective.

Become aware early on that your property has not only advantages. In the various valuation dimensions, also take into account the negative aspects and optimization potential, including any additional investment required. This way you avoid overlooking significant aspects in the valuation and potential analysis of your gastro property and will be better prepared later when negotiating with the buyer of the gastro property.

Tip: Bring in a gastro property broker early. As an expert, he knows what matters. He'll tell you which authorities can provide certain benchmark values, whether a specialized property expert should be consulted, and how the analysis results can be interpreted profitably.

Gastro brokers help with the valuation of gastro properties. Analysis of the Gastro Property. Similar to businesses, there are standard methods for valuing properties, e.g. income value or multiplier methods. In addition, asset value and other benchmark values from authorities can be used. However, these methods have disadvantages: they are general methods that are not tailored to the specific object. Since every gastro property is different, it is advisable to develop your own system, i.e. use a mix that takes all relevant aspects into account.

Analysis of the Gastro Property

Key Data and Use of the Gastro Property

In addition to location, key data such as property size, land area of the gastro property, age, building condition, state of repair, furnishings such as machines and equipment, extras and legal usage options are particularly important. They are essential for the yield prospects of the property.

It is also informative how the business has been run previously. How successful was the management and business model of the hotel, restaurant or café?

What focus or concept does the gastro property have? What alternative uses might there be? Could the hotel, for example, also be used as a senior residence in terms of usage rights? If so, this greatly increases the value of the gastro property for sale!

A playground is a location advantage. Development opportunities for gastro. Experienced gastro brokers know: hinterland, catchment area and development potential of the region play a major role in determining the value of a property.

Development Opportunities for Gastro

Tip: Before the sale, find out whether there are already concrete development plans from political bodies. Will projects be realized in the near future that make the region more attractive, e.g. for affluent clientele, families or tourists?

Goodwill Factors

Soft factors such as the good reputation of an establishment, long-standing history, loyal regular customers, as well as location advantages in relation to suppliers and central service providers can greatly influence the value of a gastro property. If an ongoing business is to continue, personnel aspects can increase the selling price, e.g. that the workforce can be retained. They greatly expand the negotiating scope since they mean good starting conditions or facilitation of the ongoing operation.

The Other Side of the Coin

In addition to all positive factors and development opportunities such as future profits and returns, it is important to also identify negative factors in the gastro property analysis.

What disadvantages, weaknesses and optimization potential exist? Where are corrections clearly and unavoidably needed? How high is the additional investment required that a potential buyer would have to make if they purchased the restaurant, hotel, café or other gastro property?

Tip: Ask yourself what work you might be able and willing to do yourself to maintain the selling price.

Comparable Values of the Gastro Property

Use comparable values. Is there a property with similar characteristics to yours that was recently sold? The available information can help you with the calculation.

Tip: Contact a competent gastro property broker. This saves you research and gives you reference values firsthand.

Clear formula - clear value. Plausible calculation methods. There is no royal road to calculating a property valuation. Stick to the benchmark values that are indisputable and develop your own, as plausible as possible method. Get support from an experienced gastro property expert. List all seriously available values regarding your property's characteristics, the surroundings, operating results and forecasts; compare these with appropriate values.