Punch Taverns rules out REIT in short term

Punch Taverns, the country largest pub landlord, has ruled out putting property into a Real Estate Investment Trust (REIT) in the short-term.

Giles Thorley, chief executive of Punch Taverns, said the value of its property was now better recognised by investment markets.

He added the company would consider any activities that could add value, including REITs, but the best long-term returns for shareholders were, at present, best served by its current business structure.

As of 3 March, Punch owned 9,304 pubs in the UK of which 8,119 were leased and 1,185 were managed. Since then 869 smaller leased pubs have been sold to Admiral Taverns.

Pre-tax profit grew 12% in the half year to 3 March to £130m (2006: £116m) while turnover rose to £912m (£618.9m) as it bedded down its January 2006 acquisition of Spirit Group and September's purchase of Mill House Inns.

During the 28 week period Punch continued its programme of transferring smaller managed pubs in the Spirit estate over to lease arrangements with terms agreed for 519 pubs and the programme due to complete in August.

Thorley said: "Both our leased and managed estates continue to perform well and will be further enhanced by the completion of the transfer to lease process and recently announced corporate transactions."

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By Christopher Walton

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