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Fri 14th Jan 2022 - SA Brain close to striking £100m deal to sell circa 100-strong pub portfolio
SA Brain close to striking £100m deal to sell circa 100-strong pub portfolio: Welsh brewer and retailer SA Brain is close to agreeing a deal to sell the freeholds of circa 100 pubs to Song Capital and Cerberus Capital Management, the former owner of Admiral Taverns. Sky News reports pub industry sources said on Friday (14 January) a transaction could be signed in the coming days. Song Capital was established by Daniel MacKinnon and Tom Pritchard, two real estate executives. MacKinnon previously worked with Alan McIntosh, the founder of Punch Taverns, while Song Capital’s other partners include Neil Hyman, a former Slaughter & May partner, and Glyn Barker, chairman of Berkeley Group, the FTSE-100 housebuilder. The transaction, which is thought to be valued in the region of £100m, will generate substantial proceeds for Brains’ family shareholders, with the funds expected to be used to pay down debt. The pub freeholds being acquired by Song Capital and Cerberus are understood to represent the core of the Brains pub estate, leaving the company as a family-owned brewer with a small residual pub portfolio. SA Brain has put the freehold investment of 99 pubs on the market for in excess of £87.3m last year. The purchase at this level would reflect a net initial yield of 5.75% in return. The portfolio provides an annual gross rent roll of £5,420,000 (£5,410,518 net) and has a weighted average unexpired lease term of 24.35 years to expiries, and 14.35 years to tenant break options. Propel revealed in July the portfolio, consisting of 93 freehold and six long leasehold properties let to Marston’s on 25-year leases, was being put on the market. Real estate advisor Avison Young was instructed by SA Brain to sell the investment interest, which is split between managed and tenanted outlets, with a mix of town and city centre, suburban and rural locations. They are mainly based around Cardiff, Newport and Swansea in the south, with clusters also in west, mid and north Wales. At the end of 2020, SA Brain announced contracts had been exchanged with Marston’s to operate its portfolio of 145 pubs in Wales on a combination of leased and management contract arrangements. Marston’s has been operating 135 freehold pubs on a leasehold basis since last February and is operating the remaining ten short-leasehold sites on a management contract basis for a period of two years.

Latest edition of Propel Turnover & Profits Blue Book now available to Premium subscribers: The latest edition of the Propel Turnover & Profits Blue Book, which is produced in association with Mapal Group, is now available to Premium subscribers. A further 48 companies have been added, taking the number of UK pub, restaurant, cafe and hotel operators featured to 507. It also features group editor Mark Wingett’s next quarterly pick of the companies well-placed to grow in the post-pandemic era. His latest pick of companies are Brakspear, Simmons Bars, Hub Box, Park Holidays, Vaulkhard Leisure, Hostmore, QFM Group, Caprice Holdings and Ivy Collection. The picks are also accompanied by a 2,100-word report. The Blue Book, which is updated monthly, shows the full damage done to the sector by the pandemic, with 321 companies making a combined loss of £8.17bn compared with 186 companies in profit – making a combined £797m. Losses now outstrip profits in the sector ten times over. Total turnover of the companies stands at £28.5bn. The Blue Book provides a five-year overview of turnover and profit, ranking companies according to turnover, pre-tax profit and profit conversion. It also provides details of directors’ earnings and highest paid directors. Premium subscribers also receive two other databases – the New Openings Database, produced in association with StarStock, and the Multi-Site Operators Database, produced in association with Virgate, which are also updated each month. Companies can now have an unlimited number of people receive access to Propel Premium for a year for £895 plus VAT – whether they are an operator or a supplier. The single subscription rate is £445 plus VAT for operators and £545 plus VAT for suppliers. Email jo.charity@propelinfo.com to upgrade your subscription. Subscribers also receive access to Propel’s library of lockdown videos and Friday Wrap interviews and now also have access to a curated video library of the sector’s finest leaders and entrepreneurs, offering their insights on running outstanding businesses in the sector. Premium subscribers also receive their morning newsletter 11 hours early, at 7pm the evening before our 6am send-out, regular video content and regular exclusive columns from Mark Wingett.

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