A pair of central London-based pubs have been acquired for £13.5m by a private European investor from a client fund of TH Real Estate, with the freehold sales representing a Net Initial Yield of sub 3.5% based upon a rental income of £503,346.

The properties, which were sold by Coffer Corporate Leisure on behalf of a client fund of TH Real Estate, are the Two Chairman, St James’s Park; and the Goat Tavern, Kensington High Street.

The Goat Tavern is a 17th Century pub dating from circa 1695, set in a prime Kensington location and is the oldest remaining pub in the area. The property comprises four floors totalling 4,51 sq ft, let in its entirety to Spirit Pub Company, a wholly owned subsidiary of Greene King. The passing rent is £306,441 per annum.

The Two Chairman is an 18th Century pub dating from circa 1729, close to Buckingham Palace and the Houses of Parliament, and believed to be the oldest pub in Westminster. It is a substantial building arranged over five levels totalling 3,355sq ft, let in its entirety to Spirit Pub Company, a wholly owned subsidiary of Greene King. The passing rent is £196,905 per annum.

Mark Sheehan, managing director of Coffer Corporate Leisure, said, “Despite the uncertainty in the market after the results of Friday’s Referendum, we will continue to witness a clear and robust appetite for pubs which have traded well for a number of years. The Goat Tavern and Two Chairman have been trading for hundreds of years, and many pubs are held on long leases such as these - which expire in 2044. This provides investors with the security of long term income and the flexibility of underlying property value. Leisure property has extremely strong fundamentals and we expect to see continued strong demand for such defensible assets.”

Savills advised the purchaser.