Sunday, September 25, 2011

Dagmar, there are concerns among people who live local to The Sun and Doves that Scottish & Newcastle Pub Company might sell the building to the hospital or to a developer for housing. Rest easy, they will not. IT'S ALL ABOUT MONEY. Pubco practice is to sell off freeholds only when they sense there is no future income from a particular unit and that is NOT the case with The Sun and Doves.

The Sun and Doves will be taken over by a Multiple Operator; someone like Grand Union. In fact S&NPC already have a taker. And GU is a likely candidate; it's a much better site for their business model than the Grove.

Selling pub freeholds individually is a last ditch stand for pubcos - as long as there's evidence a lessee can be found to squeeze the pubco's instinct is to keep a tight grip on a pub, get a lessee in and OWN them.

There are a number of other reasons why The Sun and Doves will remain a pub:

Although pubs are falling on their arse everywhere, because the system is designed to work like that, pub companies are still posting healthy profits - they make profit while the pubs make none. Every closed pub is a potential Rent; Beer; Double Income Stream and a pubco will never give that up until they can see no way of the unit trading successfully for them.

S&NPC make a lot of money out of that building and they will turn it round as quickly as possible so they can get back to milking again.

There is no way that site would get planning permission for change of use. It's clearly a viable business, if the pubco shilling is taken out of the equation.

Next; RBS owns the building (and 900 or so other pubs that S&NPC 'manage' on RBS's behalf) and they would be inclined to sell the freehold only as part of a package of pubs to some bidder who is already in the pub business.

We were trying to buy The Sun and Doves' freehold for the last four years. Not interested - they were making too much money out of it.

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