MA probe: LESG pubs made £155m
A survey by the Morning Advertiser into property sales at public auction by London & Edinburgh Swallow Group (LESG) has revealed receipts of around £155m.
The survey, part of the MA's ongoing investigation into the collapse of the UK's ninth largest pub group, found £130m of sales in just two years - 2004 and 2005. The company collapsed within nine months of the last major batch of auction sales.
LESG's property sales produced huge profits because investors were offered very high rental returns on sites it tenanted.
Alan tended to be headstrong. You would say to him: 'That doesn't make sense'. And he'd often do it anyway - he wasn't the best listener MA source.
Some observers believe that many LESG sites were marginal or loss-making once sold for high prices at auction because of the rents.
Many investors are now discovering that LESG pubs and hotels are worth far less than they paid for them in the auction market.
One source who worked closely with LESG founder Alan Bowes said: "It's not good for the trade that property investors are getting their fingers burnt.
"It's also pretty bad for tenants because they have been taking leases on pubs on an over-rented basis.
"Alan tended to be headstrong. You would say to him: 'That doesn't make sense'. And he'd often do it anyway - he wasn't the best listener."
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