Enterprise to raise £10m more at auction

Enterprise Inns is hoping to raise a further £10m by selling the freeholds of seven pubs at an Allsops auction planned for 3 December. The company...

Enterprise Inns is hoping to raise a further £10m by selling the freeholds of seven pubs at an Allsops auction planned for 3 December.

The company is offering to sell the freeholds of the seven London pubs with a 35-year lease back to itself.

An Allsops auction last month raised around £15m by selling six pubs. The latest pubs to go to auction are:

• The Red Lion, St James, London, which is being offered with a promise of £90,000 a year in rent

• The Pembroke Castle, Primrose Hill, London, which has a rent of £120,000 per annum

• The Bell, City of London, which has a rent of £95,000 per annum

• The Rising Sun, St James, London which has a rent of £90,000 per annum

• The Uxbridge Arms, Notting Hill, which has a rent of £100,000 per annum

• Edgar Wallace, Essex Street, London, which is being offered with a rent of £100,000 per annum

• The Pelican, Fulham, which is being offered with a rent of £100,000 per annum

Like the first batch of pub Enterprise took to the auction market, the pubs are being offered with a 35-year lease, subject to a break clause in favour of Enterprise at 25 years on service of six months' notice.

The Pembroke Castle is sub-let to Barracuda Pub Company. The combined rent roll being offered by Enterprise is £690,000, which would raise around £10m if the pubs sell for a similar covenant yield as the first six to hit the auction market.

At the first auction, Enterprise was offering buyers of their pubs between 80% to 90% of its total income from each pub. Enterprise was promising to pay rent for 35 years while earning around £20,000 to £30,000 in retained income.

A property expert said: "It's selling these pubs for a 14 to 15 times multiple of earnings thanks to low bank interest rates and the promise of 6% yield on investor's money."