Enterprise to auction 8 pubs for £15.5m
Enterprise Inns is planning to sell eight more London freehold pubs at a London auction.
The tenanted operator is hoping to raise around £15.5m at an Allsops auction on 10 February through sale-and-leasebacks of pubs where it is offering a combined £900,000 in rent.
As in previous auctions, Enterprise is offering prospective freehold investors a 35-year lease with an option for Enterprise to break at 25 years subject to six months' notice. The company has previously stated that it reserves around 15% of total current income from the pubs it takes to auction.
The eight pubs are:
• The Cumberland Arms, Hammersmith (rent of £100,000 a year with the pub let to Purple Tiger Pub Company)
• The Lillie Langtry, Fulham (rent of £95,000 a year with the pub let to MJ Conway)
• Round Midnight, Islington (rent of £80,000 per annum with the pub let to Nervous Tension Venues)
• The Nellie Dean, Soho (rent of £155,000 per annum with pub let to Fleetcross)
• Northumberland Arms, Tottenham Court Road (rent of £125,000 per annum with the pub let to Faucet Inn Pub Company)
• Smugglers Taverns, Marylebone (rent of £95,000 per annum with the pub let to Davent Pub Company)
• The Metropolitan, Westbourne Park (rent of £140,000 per annum withe pub let to Realpubs)
• Northumberland Arms, King's Cross Road (rent of £110,000 per annum with pub let to Daghs Limited).
Enterprise has stated that it might raise as much as £200m through the public auction route — it has so far raised around £35m.
Enterprise's freeholds are proving attractive to high net worth individuals who currently receive very low rates of interest from banks and building societies.
Chief executive Ted Tuppen has argued that the public auction strategy does not amount to selling the pubs because the company retains an operational interest.
He has pointed that in mid-2009 Enterprise had a very low rent roll of around £1.6m and could easily increase this to around £14m without undermining the strength of its balance sheet.
Guide prices for the eight pubs will not be given until later today (Monday) but a 6% yield — in line with previous auction results for Enterprise — would raise £15.5m
