Pubs go under the hammer to repay debts

A number of central London pubs will go under the hammer next month in a sale-and-lease-back enterprise by a pub group.

In an effort to raise funds to pay off debts, Enterprise Inns will put 10 London pubs on the market and then lease back the premises. The pub group hopes to raise almost £11 million through the process.

In line with previous sell-and-lease-back auctions, Enterprise Inns proposes to lease back the pubs on a 35 year lease, for a total rent bill of £725,000. This suggests an overall yield of 6.78 per cent.

Some of the London pubs that will go under the hammer at Allstop Auctioneers on 6 July include The Stage Door in Waterloo on the South Bank.

Varying in guide prices, the most expensive pub listed is the Prince of Teck in Earl’s Court. This is listed with a guide price of between £2.35 million and £2.55 million with an annual rent of £160,000.

If you are in the market for a less pricey London pub, the Prince of Wales in Clapham, South London, is going for between £750,000 and £800,000 with an annual rent of £60,000.
To date Enterprise Inns has sold - and subsequently leased back - more than 50 pubs through similar auctions in the past nine months.

The group say the success of such auctions illustrates the value of its property portfolio. However some observers disagree and point out that the yields being achieved do not reflect conditions outside the capital.

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