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A Guide to Discrete Marketing in the Leisure Property Industry

Confidentiality is key within the leisure property market. Often, management will seek to shield staff and customers from the sales process to minimise disruption. A lack of tact and discretion can have serious repercussions for customer footfall, the supply chain and for team morale.

Whether it be the freehold, leasehold or tenancy, the selling party may opt for a confidential listing. These confidential property listings are sparse on public details, often just providing the bare essentials such as general location, floor space and use class, however some listings will even withhold this information to operate completely off the market. 

Often, we are asked whether a confidentially listing will make it harder to find the right buyer when selling your restaurant, pub or leisure property, a question to which there is no definitive answer. Whilst confidential disposals offer a great level of privacy to the seller, they are not appropriate for every sale and can even damage certain transactions. 

To help you decide whether a confidential listing is right for you and your property, we’ve put this guide together.

What is a Confidential Disposal?

A confidential disposal involves a preliminary Confidentiality Agreement, otherwise known as a non-disclosure agreement (NDA). This legally binding document keeps the key details out of the public domain, especially any discernible information that could be used to identify the seller or the property. Within the agreement will be the details of what information is considered confidential, as well as outlining the obligations of the recipient of the confidential information. Important exclusions, such as disclosing information with legal advisers or solicitors, will also be set out. 

Only once the interested potential buyers have signed legally binding non-disclosure agreements will they receive the full sales details. The interested buyer can then only use the confidential information to help proceed and advance the sale process. Should the transaction fall through or not proceed, there are often clauses or provisions that all confidential information must be returned and / or destroyed. 

Every contract is different with regard to the extent of the confidentiality. Certain confidentiality clauses can extend even to clauses such as restrictions upon placing notice on the seller’s Land Registry titles. Despite the differences in specific clauses and details, all confidential commercial property sales are united by the intention to ensure certain parts of the deal are not disclosed to the general public. Information already in the public domain is not covered by a confidentiality agreement.

When is a Confidential Disposal suitable?

There are many different motivations behind wanting a confidential listing. A seller might be wanting to test the market or to tempt a certain buyer, without fully committing to the widespread marketing associated with a public sale. Certain sellers will be concerned that public knowledge of the sale could have a detrimental effect on the business, whether it be:

  • Loss of customers who stay away from a restaurant deemed to have an uncertain future
  • Disruption to supply chain and working capital management due to perceived uncertainty of business finance
  • Staff concerned about what a new owner would mean for their job security

By choosing a confidential listing, the sellers enjoy a higher degree of privacy safe in the knowledge that their information is held in strict confidence, protected by a legally binding document. This will help to minimise the disruption of the sale on business operations.

Are there any associated pitfalls?

When marketing your property confidentially, you do run the risk of putting off some parties who might have been interested should more information have been made available. Therefore, confidential disposals can run the risk of getting less interest and therefore staying longer on the market. Similarly, due to the limited information publicly available, you might receive enquiries from parties to whom your property isn’t quite what they are looking for when they receive access to the full information.

To mitigate this, it is important to choose an agent with a large, active and relevant database of interested buyers. The agent will be responsible for discreetly marketing your property to relevant active buyers who are seeking a property like yours. Should an agent have an outdated, incomplete or irrelevant database, the confidential sales process will be made more difficult and the enquiries are more likely to be fruitless as relevant buyers will be harder to find and approach.

As London’s leading leisure property agency, Restaurant Property is proud to utilise an extensive, detailed database of known operators in the industry. Our wide reaching industry contacts enable us to deliver an efficient and discreet confidential service where your property will be carefully matched with interested and relevant buyers. Should the time come where you need to present your property to the wider market, we are able to draw upon our extensive network of leisure operators to give your property maximum relevant coverage.

If you are interested in starting your confidential disposals journey, whether as a seller or to register as an active buyer, register your property requirements with the Restaurant Property team. If you are still undecided whether a confidential listing will be beneficial or detrimental to your property or business, our team of property experts are on hand to guide you through the process from start to finish, calling upon years of experience and industry knowledge to ensure the best solution for you and your property.

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