Ei agrees sale of property portfolio for £348m

Some 370 sites out of its 412 commercial properties will be sold to Tavern Propco for £348m.

Properties in the portfolio include free-of-tie pubs and former pub sites that have been converted for alternative use.

The group said the disposal​ will allow it to drive growth in its core Publican Partnerships, Managed Operations and Managed Investments divisions and reduce its debt.

High-quality assets

The newly incorporated Tavern Propco is owned by Davidson Kempner Capital Management and has more than $31bn (£28.3bn) in assets under management. It has paid a deposit of £33.66m for the portfolio. 

Ei chief executive Simon Townsend said: “We are very pleased to have agreed the sale of the portfolio, which is in line with our strategy of delivering attractive and sustainable returns to shareholders by unlocking the embedded value and optimising the returns from every asset within the business.

“The portfolio is comprised of high-quality assets, which we believe are best suited to a free-of-tie, rent-only business model,” he added.

“Throughout the sale process, we have been impressed with the commitment and speed of execution demonstrated by Davidson Kempner, a global institutional investment management firm with over $31bn in assets under management and a long track record of investing in real estate.”

The company did not reveal how many of the properties were still trading pubs or what would happen to them after the sale.

Ben Wilkinson, CAMRA's national director responsible for pub campaigning, said the group was concerned about what would happen.

He said: "While on one level few pub tenants are likely to regret the disappearance of Ei Group from their lives, there is, of course, concern about the intentions of the new owner. It is essential these pubs are given the chance to thrive under a fair, long-term business model - not viewed simply as property assets to be converted for a quick buck. 

"Too many times in the past we've seen large pub company disposals result in the closure of viable pubs, robbing communities of their locals and licensees of their livelihoods. The buyer of these properties has a responsibility to its tenants and customers to set out its intentions at the earliest opportunity." 

Davidson Kempner did not wish to comment on Tavern Propco's intentions with the sites.