Kurnia Group to downsize pub estate

04-Aug-2010 - Last updated on 11-Mar-2017 at 23:52 GMT

Kheng: wants to concentrate on training and consultancy

Lincolnshire operator Kurnia Group is looking to downsize its seven-strong pub estate to concentrate on its property and training portfolio.

Lincolnshire multiple operator Kurnia Group is looking to downsize its seven-strong pub estate to concentrate on its property portfolio and expand its consultancy and training business.

Kurnia, led by Michael Kheng, currently operates seven pubs and bars in Lincolnshire but is looking to reduce that number to at least four by the end of the year.

Kurnia is already in discussions with one unnamed potential buyer to lease or sell the Library Bar in Lincoln, which is situated on the University of Lincoln campus.

It is also looking for a tenant to take on The Book in Hand in Mablethorpe. All leases will be free of tie and on "reasonable rents".

Meanwhile, it has applied for planning permission for alternative use at Kai's Bar Louth with a view to building seven two bedroom town houses, which Kheng believes would double the value of the property. If the application is unsuccessful, Kurnia will look to lease the site out to a tenant.

Kurnia will continue to operate the Cloud Bar in Lincoln, Kai's Bar in Maplethorpe and the Louth Hotel. It also runs the Pavillion Bar in Lincoln under contract from the council.

Trade dip

Kheng said the four sites had seen a dip in trade and profit margins had reduced.

"Recently most of my attention is being diverted to the operational side of the pub company and being a small company in terms of structure this is becoming more demanding," he said.

"We shall continue to operate a small number of bars but I would rather use my skills and knowledge in assisting tenants along with clients within the industry."

He said Kai's Bar in Louth had struggled with a £12,000 Sky bill and was set to ditch the service at the end of the month. "We have to take an extra £650 a week to make it worthwhile," he said.

But he also blames cheap supermarket alcohol and increasing wages for a dip in trading performance. "It was fairer when there was a regional minimum wage," he said. "But now we have to pay the same wage as in London."

Soaring utility bills are also a problem for Kheng despite seeking advice from the Carbon Trust and re-brokering all providers. "The sites would do better with a tenant rather than a managed site with all the associated wage costs," he said.