Punch Taverns to sell off 158 pubs

Punch Taverns describes the pubs it is selling as “non-core” to its estate.

The agreement is consistent with Punch’s strategy to sell the non-core estate at a rate of about 200 pubs per year.

The disposal comprises 150 pubs from the non-core estate and eight pubs from the core estate that “no longer meet our criteria as a core pub”.

The agreement will leave the company with just shy of 3,500 pubs – with the non-core estate standing at 550 premises.

Punch said it will issue a full-year trading update for the financial year to August 22 on September 1.

NewRiver Retail Limited announces that it has exchanged contracts to acquire a portfolio of 158 pubs across England and Wales from Punch Taverns for a total consideration of £53.5 million which equates to a net initial yield of 13.61%.

The deal follows a similar one in 2013, when NewRiver bought 202 outlets from pub group Marston’s and then signed deals to open a number of Co-operative grocery stores and post offices in land attached to these pubs. Last October it managed to cut is borrowings by £600m leaving it with debts of £1.5bn. 34% of sites are based in the South East and South West. In the last 50 and 100 days, Punch Taverns PLC is up 4.96% and up 24.51%, respectively.

Allan Lockhart, property director at NewRiver Retail, said: ‘In many ways this Portfolio is similar to our Marston’s transaction, in that we expect to deliver exceptional cash on cash returns and attractive capital growth through asset management and development.

NewRiver said it had no plans for significant disposals, and instead intends to develop large auto parking spaces and surplus land attached to the pubs for commercial or residential purposes.

NewRiver Retail has projected the annual pre-tax profit of the Punch pubs to be about £6m.