THE AGENTS

Richard Payne

Senior negotiator

Caldicott Payne

Caldicott Payne is involved with a vast amount of tenant recruitment and acquisition for Punch Taverns' southern regions.

There is currently a lack of understanding of how premiums are put together and asking prices arrived at for what are, in real terms, only partially-tied leases. Purchasers tend to take advice from their accountant when researching the level of offer to put forward on new leases.

When an acquisition is made, the profit-and-loss accounts for the original owner/freeholder will show a certain operating profit, percentage of gross profit, conversion of turnover to profit, and trade split associated with their freedom to purchase out.

Whilst they are used as a guideline, the ultimate figures of achievable net profit, percentage of gross profit, sustainable annual rent and overall projections are made with the Punch Taverns' retail prices inclusive in any calculations presented to a prospective buyer.

It is Caldicott Payne's understanding from past experience, that purchasers and their advisors do not consider this to be the case and assume a large shift in the numbers when deciding at what level to offer. The real situation at present, given what we have discussed, is that there still remains a huge demand for these types of leases, and current acquisition activity has shifted to purchasing and bringing extremely mixed-use sites into the Punch fold.

When you consider that a particular pub's turnover may now be derived from accommodation and food - which are of course not tied - and the new lease you are signing is only tied on draught beers and bottles, there is an excellent living and profit to be made after rent.

The figures at present point to an average premium of £85,000-£100,000 in the south of England for new leases and assignments.