The Royal Bank of Scotland (RBS) is looking to dispose of its near-1,000 pub estate, writes Paul Charity.
RBS has been testing the water to see whether there are any buyers for its pub estate despite difficult market conditions.
The bank’s pub estate, which is managed by Scottish & Newcastle Pub Enterprises (S&NPE), is high quality with an average annual barrelage per pub around the 350 mark.
The estate, the marketing of which is code-named Project Galaxy, produces earnings of around £70m, which would suggest it is worth upwards of £600m.
Industry contacts suggest the RBS pubs, which includes the Punch Bowl in Mayfair, tenanted by film director Guy Ritchie, have attracted interest from three property firms and one trade player.
A RBS source said: “We constantly review our property portfolios and holdings.”
The majority of the RBS estate has been owned since 2000. The bank bought 481 leased pubs from Scottish & Newcastle in February 2000.
Under the deal, S&NPE division will manage the properties on the bank’s behalf for at least 10 years.
A spokesman for RBS said at the time: “We’re not moving into the pubs business. This is purely a financial deal which provides us with a high quality income stream.”
Any sale of the RBS pub estate would not affect its management arrangement. One industry source stressed how important the S&NPE estate is the parent company Scottish & Newcastle’s pub profits.
