Enterprise Inns is pulling back from plans to become first pub group to adopt tax efficient Real Estate Investment Trust (REIT) status, due to the turmoil in the financial markets.
Although the pub giant has been given the go-ahead by HM Revenue and Customs to place its property into a REIT, it said in a statement today that in "the light of the current turmoil in the financial markets" it would not be pushing ahead with plans to convert for now.
"We are not working to a particular timetable and will make further announcements as and when appropriate," the statement said.
Mark Brumby, leisure analyst at Blue Oar Securities, said that the decision to officially drop a REIT for now would cause "marginal disappointment to some".
In May, the decision by revenue officials to allow Enterprise to become a REIT - a move being tracked closely by rivals Punch Taverns and Mitchells & Butlers - was hailed by analysts as marking potentially the "biggest transformation in the pub sector for nearly 20 years".
Analysts believe the tax efficient structure will make investing in pub property for more attractive to a wider range of investors than have previously been involved in the sector.
In its pre-close statement, ahead of full year results on 18 November, the company said trading conditions remained tough due to the smoking ban, poor summer and continuing weakness in consumer spending.
Enterprise is currently spending £5.5m on rent concessions and special discounts for 850 struggling licensees, a figure that increased in the fourth quarter but which has now stabilised.
By Chris Druce
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