Tuesday, Nov 17, 2009

Malinvestment

Evening Standard: Enterprise Inns boss worries that UK has ‘too many pubs’

Suggestion that unsustainable debt flowed into unsustainable drinking holes.

Posted by stillthinking @ 11:28 AM (3114 views)
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3 Comments

1. inbreda said...

Quite

I was chatting to the locals in a pub I stayed in recently that had been bought by Punch for a stupid sum of money (rather than pricing it on its profit) financed by debt. They then had a succession of landlords that have been unable to pay the rent (designed to cover the debt) until eventually a landlord came along and negotiated a realistic rent based on what he would be able to service. Punch must be losing on the deal - but if they sold they would probably lose 50% on the deal. This is another example of how everything will scrape by so long as interest rates don't rise which I'm afraid they will have to. Particularly if savers boycott the banks.

It is not the case that uk needs less pubs. It is the case that pubs need to be priced at realistic levels, not as investments based solely on the property value.

Tuesday, November 17, 2009 12:14PM Report Comment
 

2. mark said...

shame the supermarkets like Tescos don't realise we have too many supermarkets.. after all we can only eat so much...

Tuesday, November 17, 2009 12:53PM Report Comment
 

3. drewster said...

In the old days people used to go down to the pub, have a few drinks, talk to their friends, and complain about the state of the world. Now the internet has taken over all those roles, it's no surprise to see pubs closing. I agree that the debt-fuelled spending spree hasn't helped matters; but pubs were on the decline anyway.

Tuesday, November 17, 2009 01:12PM Report Comment
 

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