Punch Taverns is pioneering a new approach to its estate with a sale-and-leaseback deal for 12 pubs acquired from Honeycombe Leisure.
Preston-based Honeycombe will pocket £11.7 million by selling the 12 freehold to Punch, while continuing to manage the pubs. Punch will see an income stream from the tied leases. Punch chief executive Giles Thorley described the arrangement as "a template for similar deals in the future."
Honeycombe, which still has around 70 pubs of its own following the deal, will use the cash to fund further expansion of the business, aiming to grow by up to 20 pubs this year.
Honeycombe chief executive James Baer said: "Not only does the transaction reduce substantially Honeycombe's bank borrowings but, more importantly, it also establishes a relationship with Punch." Baer said Honeycombe would look at similar sale-and-leaseback deals in the future.
Mr Thorley said the deal gave Punch the opportunity to acquire a high quality pub portfolio,let to an excellent operator. "We have admired the quality of Honeycombe's operation for some time and have been discussing with them ways of developing a mutually beneficial relationship. This transaction brings together the finance and capital capability of Punch with the retailing skills of Honeycombe."