British Land has bought 65 freehold pubs from Spirit Group for £174m, reflecting an initial yield of 6.1%.
Managed pub group Spirit will continue to operate the properties on 30-year leases without a break and with annual rental uplifts reverting to open market rents from year 15.
Bob Bowden, investment director at British Land, said: “This acquisition increases the size of our leisure portfolio with high quality public houses at a higher average lot size than those we owned previously, and let to the leading pub operator.”
British Land has considerable experience in investing in the pub market, having owned a property investment company in partnership with pub company and brewer Scottish & Newcastle for almost 10 years.
The joint venture, which was financed through bank borrowings, bought 306 pubs that were let to Scottish & Newcastle, all but two of which have now been sold with a profit.
References: EGi News 20/10/04
