Stonegate Group, the prominent pub chain that owns well-known brands like Slug & Lettuce and Be At One, has initiated the sale of 22 pubs across various locations in England. The properties are being marketed by the estate agent Savills, with individual prices ranging from as low as £450,000 to £1.5 million.
Strategic Portfolio Review
The move comes as part of Stonegate's ongoing review of its extensive portfolio, which comprises approximately 4,300 venues nationwide. This latest sale could represent a significant step in the company's broader strategy to potentially divest a larger portion of its assets. Reports from The Times indicate that Stonegate executives have been in discussions with potential advisers regarding the sale of up to 1,034 of its so-called "platinum" pubs, which could collectively be valued at around £1 billion.
Financial Context and Debt Management
Stonegate's financial landscape is marked by substantial turnover and significant debt. The group reported a turnover exceeding £1.7 billion last year, but it also carries debts totalling more than £3 billion. A considerable portion of this debt was accumulated through the acquisition of Ei Group in 2019, a transaction that occurred just months before the COVID-19 pandemic forced widespread closures in the hospitality sector.
A spokesperson for Stonegate commented on the situation, stating, "We are looking at options for the Platinum portfolio, of circa 1,000 Leased and Tenanted pubs, which could include a refinancing, partial sale, or full sale of the Platinum sites but as we explained to our bondholders, no decisions have been made. We are continuing to make good progress on our transformation strategy."
Previous Attempts and Current Market Conditions
This is not the first time Stonegate has attempted to sell a portion of its pubs. In 2023, a similar effort to offload a number of venues did not come to fruition. Following that unsuccessful attempt, the pub group secured a refinancing deal involving 1,000 of its properties, obtaining a £638 million loan from the private equity firm Apollo.
The current sale involves 22 pubs that are being offered as going concerns, with all properties let on long leases that include annual rent reviews linked to the Retail Price Index. This structure is designed to appeal to investors seeking stable, income-generating assets.
List of Pubs for Sale
The following pubs have been placed on the market by Stonegate Group, with their respective asking prices and net initial yields (NIY) where applicable:
- Bell, Solihull - £1,250,000 (7.46%)
- Bo-Peep, Orpington - £730,000 (7.74% NIY)
- Bridge Arms, Canterbury - £900,000 (8.38% NIY)
- Chequers, Norwich - £690,000 (8.50% NIY)
- Church House Inn, Paignton - £700,000 (9.38% NIY)
- Crown, Bath - £950,000 (8.52% NIY)
- Dog and Fox Inn, Bradford-on-Avon - £715,000 (8.31% NIY)
- Dovecote Inn, Tonbridge - £625,000 (7.88% NIY)
- Green Man, Welling, London - £950,000 (7.73% NIY)
- Hobnails Inn, Tewkesbury - £1,075,000 (7.43% NIY)
- Kings Head, Yarmouth - £865,000 (7.94% NIY)
- Kyoto Kitchen, Winchester - £875,000 (9.02% NIY)
- Lamb Inn, Weston-Super-Mare - £475,000 (9.53% NIY)
- Louisiana, Bristol - £525,000 (8.50% NIY)
- Market Hotel, Alton - £675,000 (7.92% NIY)
- Merry Monk, Taunton - £1,200,000 (9.63% NIY)
- St George’s Vaults, Cheltenham - £450,000 (7.35% NIY)
- Swan Hotel, Hythe - £710,000 (9.44% NIY)
- Trout Inn, Cirencester - £800,000 (6.31% NIY)
- Union Inn, Newton Abbot - £450,000 (8.08% NIY)
- White Horse Inn, Somerset - £555,000 (7.75% NIY)
- World’s End, Northampton - £1,500,000 (8.08% NIY)
Expert Insight on Pub Investments
Stuart Stares, Director in Savills licensed leisure division, provided his perspective on the current market dynamics. He remarked, "Pubs remain one of the most resilient and appealing investment classes in today's market, underpinned by strong fundamentals such as long-term leases, index-linked rent reviews and strong underlying property value. Investor confidence is being reinforced by improving trading results across the sector, particularly during the Christmas trading period alongside a more optimistic economic background including easing interest rates and steady consumer spending. Consequently, we're seeing growing demand for well-let pub assets, particularly those offering secure income and long-term growth opportunities."
This sale initiative reflects broader trends in the hospitality and property sectors, where established chains are reassessing their portfolios in response to economic pressures and strategic objectives. The outcome of this sale could provide valuable insights into the health of the UK pub market and investor appetite for such assets in the current climate.
