Property investor buys UK pub group for £107m

Property investment company NewRiver has completed its acquisition of UK pub chain Hawthorn Leisure for £106.8m, creating a business with more than 600 pubs to its name.

The Birmingham-based pub chain comprising 298 pubs has been bought for £106.7m

Based out of Birmingham, Hawthorn Leisure was founded in 2014 by Noah Bulkin and has 298 pubs in its portfolio, mainly in the north of England.

Founded in 2009, NewRiver is one of the UK’s largest owners of convenience-led community shopping centres with a UK property portfolio of £1.3bn, which comprises 33 shopping centres.

Acquiring the group from Avenue Capital for £106.8m, NewRiver said it had targeted the pub sector because of its “low-risk, diversified cash returns”.

The company acquired its first portfolio of 202 pubs from Marston’s PLC in November 2013, and another 158 pubs from Punch Taverns in 2015.

With this latest acquisition, NewRiver is now responsible for a portfolio of more than 600 pubs. 

Mark Davies, chief financial officer said: “Having acquired our first portfolio from Marston’s in 2013, we are well aware of the attractiveness of the high cash returns generated by pubs, as well as their inherent active asset management and risk-controlled development opportunities.

“Importantly, we have also retained cost discipline on this transaction that we have tracked for some time, acquiring the portfolio at an attractive net initial yield of 13.6% and inheriting a strong brand and management platform.”

NewRiver also said it would look to maximise the potential of new sites by building convenience stores or residential units on surplus land adjacent to pubs.

In the year to 31 December 2017, Hawthorn Leisure generated an Adjusted EBITDA of £9.9m.