Tom Hunter’s West Coast Capital is reported to have teamed up with Prestbury Investment Holdings and HBOS in order to buy a portfolio of 220 freehold pubs from Spirit Group, in a deal worth over £500m.
Under the deal, which is expected to be finalised within the next week, the pubs will be let back to Spirit on leases of 30 years. Spirit is understood to be paying an initial rent of around £30m a year, with annual uplifts.
The bidding consortium successfully beat Rotch Property Group to the portfolio, plus a number of UK funds and other investors. Colliers CRE and Lazard are representing Spirit.
Spirit became the biggest managed pub chain in the UK when it acquired Scottish & Newcastle Retail for £2.51bn last year. The portfolio for sale represents just 15% of Spirit’s total estate, which includes around 2,500 pubs plus a number of restaurants and budget hotels.
Commenting on the deal, a source close to Spirit commented: “It releases cash to Spirit less than six months after it bought S&N. But it also leaves the group with a large amount of fixed assets for a future IPO. The analysts are likely to look favourably on the way Spirit has begun to make the portfolio work for itself.”
Last week, Spirit officially put its Premier Lodge chain of budget hotels up for sale with a price tag of around £500m.
Source: Freemans News / Estates Gazette