Some of the UK’s best pubs change hands

A sign that all is not well in the pub trade comes with the News that the Punch Taverns Group have sold six of their prime managed freehold pubs in central London for nearly 20 per cent below their current market price. The buyers, Fuk

a signal highly leveraged pub groups may be struggling to offload their poor-performing assets and are having to let go of prime properties to pay down debt to Fuller Smith & Turner The six pubs, described by Michael Turner, Fuller’s chairman, as “exceptional quality assets” were sold for £21.1m in cash, their locations including Kensington, Parliament Street in Westminster, Hatton Garden and Hyde Park.

They had 2007-08 earnings before interest and tax of £2.5m and a book value of £25.6m as of August 23.

Giles Thorley, Punch chief executive, said the deal demonstrated its desire to increase free cash flow and to reduce the overall level of debt, “whilst seeking to maintain investment in our high-quality pub estate”.

Punch is not alone in putting pubs up for sale, as groups look for remedies to combat the consequences of declining trade and indebtedness. The group, which has a net debt of £4.5bn, put 500 low-performing leaseholds up for sale and last month gave tenants first refusal on its entire portfolio of 7,400 leased pubs.

The Bank of England announced that the U.K. Economy shrank by 1.5 percent in the fourth quarter 2008, the most since 1980, and predictions are that a similar rate of contraction can be expected for the first quarter of this year.

On a more optimistic note, the figures announced by the statistics office reported that investments in UK business fell by only1.5 percent in the last three months of 2008, sufficiently less than the previous estimate of 3.9 percent.

Songbird Estates, the controlling shareholder in the iconic property development in London’s Canary Wharf, that came to symbolise London’s revival as a global financial centre, issued a warning on Thursday that they were in danger of breaching a key debt agreement during the coming year on a $1.27bn loan taken out with Citigroup.

On the news of disappointing retail sales in February, the pound dropped by 0.4 percent against the dollar, closing at $1.4554

On the other side of the big pond, news that the US economy had also subsided during the last three months of 2008, came as no surprise. Average corporate profits had also reported their lowest rate since the mid nineteen fifties.

No amount of negative news seems capable of stopping the US stock markets from rising with the Dow Jones up 174.75 points to 7,924.56. The Nasdaq did even better rising 3.8% on the dat. (58.05 to 1587) .

Stocks in Asia were also still on the climb, making for the regions biggest weekly rally since 2002, as higher commodity prices and increased earnings from US companies boosted optimism among investors.

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Tags: Credit Crunch, Economy, Finance, Financial News, Fuller Smith & Turner, Pubs, Punch Taverns Group, UK Recession