Punch tenants get freehold warning
Punch tenants are being advised to contact their bank managers and get an independent valuation to make sure they are well-placed to buy the freehold of their property.
That's the view of pub property agents, after the Publican's Morning Advertiser revealed 2,300 Punch licensees will be told by the pubco this month the firm is open to offers from them for the freehold of their pub.
Punch will not be providing an asking price, and the agents claim that tenants should seek independent valuations so that they don't pay too much for their pub.
Sidney Phillips' managing director Robin Mence said that although it may be difficult to gain access to finance, in this case, the banks should consider the contents and goodwill as part of the deposit.
He said: "It does depend on the value and revenue, but if the figures stack up, it's a great time to buy a pub.
"There is the finance issue, but the banks will consider the contents and goodwill as part of the deposit.
"Pubco sales usually only offer the bricks and mortar, not the contents or goodwill because it's not theirs to sell."
Graham Allman, of GA-Select, believes that professional advice is key.
"The tenant must get professional advice so that they don't over-pay.
"I can't over-emphasise how the extra money spent early on will benefit the tenant later on.
"I also know of two banks that are very pro this type of deal, if the pub can support the rent and increase the margins, then there's a strong possibility that the tenant can afford the mortgage."
Simon Hall, Fleurets' director and head of pubs, also thinks that this is a deal that will be favoured by the banks.
"The tenant has a track record of running the pub and should be able to produce good accounts from the last three months," he said.
However, Guy Simmonds' managing director Stephen Taylor offered some words of caution: "The tenant should make sure not to pay more than the open-market freehold price.
"They should do their homework and get some independent advice, an independent valuation and a report from a structural surveyor."
