Enterprise to raise £10m more at auction
Enterprise Inns is hoping to raise a further £10m by selling the freeholds of seven pubs at an Allsops auction planned for 3 December.
The company is offering to sell the freeholds of the seven London pubs with a 35-year lease back to itself.
An Allsops auction last month raised around £15m by selling six pubs. The latest pubs to go to auction are:
• The Red Lion, St James, London, which is being offered with a promise of £90,000 a year in rent
• The Pembroke Castle, Primrose Hill, London, which has a rent of £120,000 per annum
• The Bell, City of London, which has a rent of £95,000 per annum
• The Rising Sun, St James, London which has a rent of £90,000 per annum
• The Uxbridge Arms, Notting Hill, which has a rent of £100,000 per annum
• Edgar Wallace, Essex Street, London, which is being offered with a rent of £100,000 per annum
• The Pelican, Fulham, which is being offered with a rent of £100,000 per annum
Like the first batch of pub Enterprise took to the auction market, the pubs are being offered with a 35-year lease, subject to a break clause in favour of Enterprise at 25 years on service of six months' notice.
The Pembroke Castle is sub-let to Barracuda Pub Company. The combined rent roll being offered by Enterprise is £690,000, which would raise around £10m if the pubs sell for a similar covenant yield as the first six to hit the auction market.
At the first auction, Enterprise was offering buyers of their pubs between 80% to 90% of its total income from each pub. Enterprise was promising to pay rent for 35 years while earning around £20,000 to £30,000 in retained income.
A property expert said: "It's selling these pubs for a 14 to 15 times multiple of earnings thanks to low bank interest rates and the promise of 6% yield on investor's money."
