Introducing RICS’s 2nd Edition: Valuation of Licensed Leisure Property
In July 2025, the Royal Institution of Chartered Surveyors (RICS) introduced new guidance on Licensed Premises Valuation, bringing some key updates for property owners and investors in the hospitality sector.
This replaces the previous guidance The capital and rental valuation of public houses, bars, restaurants and nightclubs in England and Wales (2010).
This updated standard aligns closely with the RICS Valuation – Global Standards (Red Book), especially VPGA 4, ensuring that licensed leisure valuations are consistent with modern, globally-recognised valuation frameworks.
It introduces a dedicated section aimed at non valuation professionals helping landlords, operators, and advisors understand the valuation process.
Key additions include a structured glossary covering terms such as “fair maintainable turnover,” “reasonably efficient operator,” Fair Maintainable Operating Profit’ providing much-needed clarity across valuation reports. The standard emphasises the specialist nature of licensed leisure valuations, advocating that only suitably experienced RICS regulated surveyors undertake such valuations.
Profits Method
This method within the income approach is commonly used to value trade related properties. The basic steps of the profits method are set out within the guidance as seen below.
For many licensed leisure properties like bars, restaurants and nightclubs, valuations are often based on market comparisons.
That’s where our experienced Leisure Agency team adds real value by providing up-to-date, local insight and comparable evidence to help ensure your valuation reflects the current market.
In a rapidly evolving hospitality sector driven by investment, diversification, cost control and changing consumer behaviour, this RICS standard delivers the clarity and consistency that our clients need.
Whether you’re a landlord, operator, lender, or investor, it reinforces the critical value of engaging qualified professionals when navigating the valuation of licensed leisure assets. Contact our Valuation team for expert advice.
