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Tue 3rd Feb 2015 - Downing reports progress on £12.8m investment in two Antic-managed pub companies
Downing reports progress on £12.8m investment in two Antic-managed pub companies: Investment fund Downing has reported progress on two Antic-managed London pub companies in which it has invested a total of circa £12.8m. Pabulum Pubs, which has £8.5m of investment, has purchased six freehold sites so far, of which two are retail sites for which consent has been obtained for conversion to pubs. Downing stated: “Hagen & Hyde (previously the Blithe Spirit) in Balham, South London was purchased for £1.75m in July 2012. Whilst the site benefited from an excellent location it was tired and the previous owners had failed to keep pace with a changing local demographic. The site was renovated and the offer repositioned in the summer of 2013 since which time sales have more than quadrupled. A second phase of capital works is planned, consisting of a roof-top terrace with separate street access, which should further enhance trade at the site. The Effra Social (formerly the Effra Conservative Club) in Brixton, South London was purchased for £860,000 in November 2012. The site was formerly a private members’ club but was purchased with vacant possession and licensing consent to operate as a pub. The site was given a sympathetic refurbishment and re-opened in February 2013. The site has been well-received, trading particularly well on peak evening trading sessions. Management is now focused on building the remaining trading sessions and food offer. Earl Haig Hall in Crouch End was purchased for £1m in December 2012. As with The Effra Social, this site was also a closed private members club. The site underwent a significant refurbishment before beginning trading in November 2013. Following a slow start, sales have been growing steadily as the site establishes itself in the heart of the local community. Further works are planned to further open up the space and to allow the site to tap into the wedding/function market. The Royal Albert in New Cross was acquired as a going concern for £1.1m in August 2013 having been operated by the same management team over the past eight years on a leasehold basis. Sales in 2014 are on budget, although higher than anticipated costs have meant that profits for the year to date are slightly behind budget. Plans are being drawn up to bring an adjacent unit into use, which will add much-needed trading space to the site. More recently the company purchased two empty retail units in areas with a rapidly changing demographic, an over provision of retail and an under provision of pubs. The sites consist of a large 1930s former co-operative store in West Norwood purchased for £1.8m in August 2014 and a former DIY store on Rye Lane, Peckham purchased for £1.3m in October 2014. The site in West Norwood is currently undergoing a substantial refurbishment and will be split into three distinct units trading as a public house, a cafe/bar and a commercial unit, which will be let. The site in Peckham is to be converted into a pub split over two floors. Both sites are due to open in the first half of 2015.” Downing’s second Antic-managed company Augusta has seen £4.3m subscribed. Downing stated: “The company has purchased two freehold pubs in London. The sites complement each other with one providing strong cashflow whilst the other builds its trade following an extensive refurbishment. The company is currently in negotiations regarding the purchase of a third site, which is also expected to provide growth potential. The Forest Tavern in Forest Gate was acquired with vacant possession in April 2013 for £775,000. The site reopened in September 2013 following an extensive refurbishment. Forest Gate is an area, which is becoming increasingly popular with young professionals but lacks quality food or beverage offerings. The site is very well located opposite the train station, and whilst trade is taking time to build, it is on a consistent upward trend. In October 2013, Augusta completed the acquisition of the Balham Bowls Club as a going concern for £2.75 million. The iconic site had been successfully operated by the same management team for a number of years on a leasehold basis when an opportunity arose to purchase the freehold. The site is currently trading in line with expectations and further works are underway to refresh and increase the size of the trading space.” Last Friday, Propel reported a new funding package has been agreed that will keep five core sites inside the Antic London estate, in a deal involving the investment fund Downing, Antic, Barclays and several Downing-managed VCTs. Steven Kenee, head of licensed leisure at Downing, said: “It’s been a long and complex process but I am incredibly pleased to announce that it is now complete. The five sites is question hold huge emotional and financial importance to the estate and we are delighted that a deal was agreed that allows them to remain in the family.” The Downing VCT and EIS funds that had funded the initial freehold acquisitions had matured. Antic runs a total of 25 Downing-funded freehold sites, with six more due to open in the first half of 2015. There are an additional dozen Antic leasehold sites that have been self-funded by the management team.

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