A Unique way of doing things

As Unique Pub Company awaits next year's full absorption into Enterprise Inns, Michelle Perrett surveys its estate and sees how their pubs are run.​While Unique Pub Company waits for Enterprise Inns to take control of its 4,080-strong pub estate in March next year it's business as usual as far as its properties are concerned. Unique pubs vary from traditional inns to high street bar concepts, with almost half of its sites being community locals, which are leased to a mixture of individual licensees and well-known pub groups. Every lessee or company runs their pub as an individual business - making their own business decisions on everything from purchasing equipment to marketing. The company offers two types of leases - a tenancy agreement that runs for between three and 10 years and a lease agreement which offers a choice of lease for 10, 20 or 30 years. The majority of the leases, between 70 and 80 per cent, are on 20 to 30-year agreements.For licensees who want to move on, there are no restrictions on when they can reassign their lease - that means that in theory a publican can reassign their lease on day one. All tenants are tied for beer and cider but there is no tie for wine, spirits and soft drinks. Last year the company expanded by a massive 900 pubs but this year it is looking for growth by individual acquisitions. Although Unique recognises that the market for freeholds is competitive, with some companies paying top prices for sites, it is still planning to expand by 12 to 15 pubs a year. It looks at between 10 to 15 pubs a week as possible purchases. Lee Middleburgh, property development director for Unique, said: "I don't think the market is over-priced. The prices are high but we are getting an adequate return on our acquisitions. A good pub will always be at the top end of the price range."We want high-volume sustainable businesses in whatever market they are - either with food or accommodation. And the supply of pubs is not radically increasing. It will stay tough to grow by one-off acquisitions."We are using our business development managers and people on the ground to find suitable pubs."The company churns between 20 to 30 sites a year and sells about half a dozen sites for alternative use annually. But for Mr Middleburgh his biggest problem is not finding pubs to purchase, but how to deal with the raft of legislation that affects the company's retailers. "The issue is that there is so much of it and we have to be able to advise our tenants," he said.Over the past five years Unique has spent over £70m in renovating 2,000 of its pubs. Its latest £200,000 investment is Windsor's Bar in Saltburn, Cleveland. "Windsor's is typical of the projects we are investing in. It was a traditional site with lots of potential and we worked with the licensees to bring it into the 21st century," Mr Middleburgh said. The company refurbishes over 400 of its pubs a year at a cost of £25m - that is about 10 per cent of its estate and it can invest anything from a few thousand pounds to £70,000 on a pub with the licensees contributing anything up to £20,000. The refurbishments can be anything from a small external facelift to adding extra facilities.While the majority of its estate is operated by individual licensees, between 15 and 20 per cent of the estate is run by multiple operators. The list boasts a number of well-recognised operators including Massive, Noble House's chain Jim Thompson's, Corporate Catering, CCC Leisure, Ever So Sensible Bars, SFI, Interpub, Larrick, Bel and the Dragon, Wishing Well and Fiddlers. It's a trend the company is keen to promote. "The rise of the small multiple and entry-managed multiple is where it is all happening," said Mr Middleburgh. The company has 16 field-based surveyors who deal with issues such as asbestos, the Disability Discrimination Act and help licensees who want to refurbish their properties. And it also has a separate department to deal with ancillary properties. Out of the 4,080 sites it owns, 400 have additional properties attached such as betting shops, off-licences, flats, historic bars, car parks and even telegraph poles, bus stops and taxi ranks.

Pictured: over the past five years Unique has spent over £70m in renovating 2,000 pubs. Windsor's bar in Saltburn, Cleveland, is a prime example following a £200,000 refurbishment.​Unique's multiple operators​

Outlet profile by style​

Stamp duty​Unique is concerned by the threat of stamp duty and the impact it could have on its business. The government plans to introduce a stamp duty land tax in December of this year, which will see licensees and other businesses charged duty based on the length of the lease rather than one year's rent. This could result in the cost of a lease going up by tens of thousands of pounds, forcing many licensees out of business and discouraging many licensees from buying their own pub. "It's a bad piece of legislation and it will affect how much our tenants pay when they go into a pub. We are pretty annoyed about this," said property development director Lee Middleburgh."People will find a way of paying the stamp duty but they may put their business at risk."Rents​The company has a code of practice for the initial letting process and rent reviews. Rents are calculated as a multiple of profit and on the fair maintainable trade of a competent operator. Leases are reviewed every five years with retail price index (RPI) uplifts each year between rent reviews. For those on a tenancy agreement annual rent reviews are also based on RPI although those on year agreements will have an upward rent review in the fifth year.Have you signed up yet?​