Tuesday, July 27, 2010

Punch plans to give new tenants 'best possible chance'

Punch are at least thinking outside the traditional pubco box here. Seems like they are finally coming round to understanding their responsibilities as Property Landlords. But what Punch really is doing here is trying to justify retaining the tie ahead of BISC 2011.

The dilemma pubcos face is one of their own making. For two decades they have abused the tie to make fabulous profits but did not invest those profits back in their estates. Their vast property portfolios have been very badly managed for two decades and the fundamentals of any property owning business have been severely neglected. Two decades of neglect's a lot of wear and tear, missed and shoddy maintenance to catch up on plus huge changes in H&S legislation and building performance codes to catch up on.

The tie is under serious threat of being legislated out of existence but they absolutely need to keep the tie just to survive. And their estates are manifestly not in lettable condition and need serious expenditure at bricks and mortar level to get them up to code.

It is a case of two minuses definitely not making a plus. A vicious circle that is unlikely to be squared by anyone who's operating a pubco now.

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