The doors are opening at the big Punch pubs jumble sale. First into the village hall to nose around for bargains will be several thousand Punch sitting tenants.
Not surprisingly, Punch will not be giving tenants a guide asking price for their pub — it doesn't want to deter "ambitious" offers that might come in. But tenants should not have too many problems working out a sensible offer given their first-hand knowledge of barrelage and performance.
And Punch has provided City analysts with guidance on the value of these pubs as a group.
They have an average book value of £280,000 and produce average annual earnings for Punch of around £42,000, a figure still in decline by 18% year on year.
A sitting tenant interested in buying their pub should add the rent and the wet rent together (composite brewer barrels multiplied by £220 minus discount) and multiply it seven times (the current prevailing multiple in the pub sector) to work out what their pub is currently worth to their landlord.
Punch has indicated that it wants to sell 500 pubs a year from this group. But this is a conservative target aimed at managing City expectations down and would happily sell much, much faster than this.
There will be plenty of pubs among this group that have untapped potential given a motivated, keen-to-invest freehold owner.
This group of pubs is, by definition, better quality than the thousands of leased pubs that Punch has already sold.
The obvious and rather high hurdle for tenants remains the need to raise a lot of equity to obtain the necessary bank lending.
The ratio stands at around 40%, so on a pub worth £280,000, a licensee will probably need to raise upwards of £112,000 to secure a bank's backing. But this fact of life is part and parcel of the opportunity here.
The banks are still licking their wounds from rather reckless lending during the boom years. Some of that lending was to companies like Admiral Taverns, which bought
thousands of the pubs that the quoted pubcos didn't want.
Banks have lost all appetite for lending to bulk buyers, having had to take massive write-downs.
The same caution now applies to all buyers, which restricts the number of buyers and, therefore, the prices that pubs change hands for.
I wouldn't be surprised if the number of sitting tenants buying their freeholds in this latest group pushes towards 20% or 400 to 500 pubs out of the total.
At some point soon, the next group of obvious buyers — cash-rich smaller investors, multiple pub operators, property groups, regional brewers and alternative-use buyers — will get a chance to wander past Punch's jumble sale table.
The historical perspective here, the rise and fall of pub property prices, is a fascinating sub-story.
Punch was an over-keen, over-optimistic buyer of tenanted pubs, fortunate, as it turned out, to have secondary buyers happy to mitigate some of the potential write-downs by taking many of these pubs off their hands.
It's hard to imagine the market that prevailed for much of the past decade ever returning — but, then again, boom and bust is a cycle the UK economy seems incapable of escaping.