City news
Punch sell-off: NewRiver seeks pub operator to manage sites
NewRiver Retail plans to make more pub acquisitions and is looking to recruit an experienced pub operator to manage its portfolio.
The landlord, which operates a number of shopping centres as well as a 202-strong pub portfolio acquired from Marston’s in 2013, confirmed last week that it had acquired 158 pubs from Punch Taverns.
The £53.5m deal covers 150 sites classed as non-core and a further eight core pubs.
NewRiver’s property director Allan Lockhart told PMA's sister publican, M&C Allegra Foodservice, that the company was committed to the tied model and was willing to look at longer leases for existing tenants.
He said: “We think the pub sector is an interesting one and somewhere where we plan to make further in-roads. We see a lot of potential for growth in the sector.
“Even after this acquisition, around 75% of our portfolio will be shopping centres with the rest split between pubs and retail warehousing. We don’t necessarily see that ratio changing but, as the business grows, it will give us the capacity to add more pubs to our portfolio in due course.”
The estate will be managed by LT Management Services but Lockhart said NewRiver would like to have a hands-on approach.
Who is NewRiver Retail?
- NewRiver is a Real Estate Investment Trust (REIT), focused on the food and value retail sector
- The value of the assets it owns is now about £1bn and includes 29 shopping centres as well as 20 high-street units, one supermarket and a number of retail warehouses
- The package of pubs it bought from Marston’s continues to be managed by the pub operator under a four-year deal
- As of mid-July, it had submitted 45 planning applications and received 13 consents to develop surplus land at the sites
He said: “LT has a great track record and we have now become one of its biggest clients, but that doesn’t mean to say that we won’t be actively involved in the running of the pubs and the relationships with the tenants. What we are also planning to do is recruit a specialist pub asset manager, someone with years of experience of working with tenants.
“What is great about the pub portfolio is that we get monthly access to the underlying sales performance in each of the pubs. That allows us to understand why some pubs do really well and how we can improve others.”
Post transaction, Punch’s core estate will comprise about 2,900 pubs and the non-core estate will have about 550 pubs.
Chief executive Duncan Garrood said: “This transaction is in line with our stated strategy of disposing of pubs within the non-core estate, reducing the overall level of our debt, while focusing on our higher-quality core pub estate.”
