Punch reports 1.4% like-for-like net income boost in core estate: Punch Taverns has reported that first quarter trading for the 12 weeks to 9 November 2013 was positive with like-for-like net income in the core estate up 1.4%. Trading in the quarter represented the fourth consecutive quarter of improving like-for-like trends and, assisted by weak weather comparatives, delivered growth in average net income per pub across the entire estate. Expectations remain unchanged with management expecting the core estate to return to full year like-for-like net income growth of up to 1% for the current financial year. The pub investment and non-core pub disposal programmes remain on track with full year capital investment expected to be circa £45m and disposal proceeds anticipated to be of circa £100m raised largely from the disposal of non-core pubs. Punch reported it is continuing to work with a number of stakeholders with the objective of delivering a restructuring proposal that can achieve as broad support as possible. Punch intends to announce such a restructuring proposal in December 2013 with the formal launch of implementation shortly thereafter. Executive chairman Stephen Billingham said: “We have made a positive start to the financial year and our results are benefiting from the operational improvements we have made over the last 12 months. Profits are in line with our expectations and we have reiterated our guidance for the full year.”

Shaftesbury – licensed retail and foodservice now accounts for 33% of our West End income; unprecedented demand for sites: Property company Shaftesbury has reported that licensed retail and foodservice operators now account for 33% of its income across its West End portfolio of 560 properties in Carnaby Street, Soho, Covent Garden, Chinatown and Charlotte Street – and there is unprecedented demand for sites. Chief executive Brian Bickell said: “London’s stature as one of the world’s leading global cities continues to grow as it becomes an ever-more popular destination for visitors and businesses, and as a place to live. The West End and our central locations are clearly benefiting from London’s dynamism and growing global reputation. Following the successful staging of the 2012 Olympics and Paralympics, which showcased London across the world, there has been a noticeable increase in domestic and international visitors throughout the year. Coupled with a gradual recovery in consumer confidence in the UK and abroad, visitor spending is increasing, encouraging retailers, restaurateurs and other leisure-related businesses to establish new ventures, particularly in and around the West End.” The company added: “Restaurants, cafes, bars, pubs and clubs are a growing part of our business, now representing 33% of current income. The wide variety of dining and leisure choices is a feature of the West End and forms an integral part of the mix in our villages, complementing our shops and drawing visitors. As with our shops, we seek out and encourage new food and beverage concepts, both from the UK and abroad, to add to the appeal of our villages. Currently there is unprecedented demand from interesting and well-funded food and beverage operators, which is continuing to drive strong rental growth. Furthermore, planning policies in the West End restrict the creation of new restaurant space, to preserve a balance with other commercial uses. As with shops, space is provided in shell form. Fit out is at the tenants’ cost and is usually substantial, sometimes costing the equivalent of three-five years’ rent. As a consequence, restaurant businesses prefer longer leases over which to spread this up-front investment. Typical lease terms: Historic leases: 25 years, five yearly upward-only rent reviews and security of tenure on expiry; Newer leases: 15 years, five yearly upward-only rent reviews. No security of tenure on expiry. The substantial investment by the tenant, combined with restrictive planning and licensing policies, make our leases valuable assets both for us, as landlord, and for our tenants. Often new operators seek out opportunities to open in our locations by taking an assignment of a lease from an existing tenant, sometimes paying a considerable premium to acquire this interest. Our leases give us considerable control over this process, enabling us to select the most appropriate operators, as well as accelerating asset management opportunities, including re-gearing lease terms and releasing surplus space for other uses and schemes. As a result of this competition for leases, it is often difficult for us to secure vacant possession of our restaurants. However, when we do, there is considerable demand from experienced and new operators seeking to launch innovative concepts.”