Farmhouse Public House, St. Isidores

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Key Points

Summary

Freehold public house investment for sale, currently let to Greene King, one of the UK’s leading pub retailers.

Description

The property comprises a detached two storey public house with brick elevations under a multi-pitched tile roof and is configured over ground, first and second floor levels. The Pond Office is a separate detached single storey building within the grounds of the Grange Farmhouse which is of red brick construction under a pantile roof. The public house buildings occupy the centre of the site with extensive trade gardens and terraces to the south and west which provide seating for approximately 220 covers.

Externally there is a large customer car park with a further gravel overflow car park situated to the south east of the property which accommodate up to approximately 55 vehices.

Location

The Farmhouse is located in the town of Kesgrave, an attractive area to the east of Ipswich in the county of Suffolk. The property is located in the centre of the Grange Farm housing development with the surrounding area primarily consisting of residential and retail uses. Transport connections are good with the A12 located 1.5 miles (2.4 km) to the north east, Ipswich train station located 7.3 miles (11.75 km) to the west and Woodbridge station located 4.4 miles (7.1 km) to the north east.

Accomodation

Ground floor
Internally the property is fitted out in accordance with Greene King’s Hungry Horse branding consisting of a large central bar servery with three restaurant seating areas featuring a variety of loose tables, chairs and fixed sofas serving approximately 180 customers. Ancillary accommodation includes a large trade kitchen and cellar, ladies, gentlemen and disabled toilets and further ancillary storage.

First Floor
At first floor level is a manager’s flat comprising of a small kitchen, living and dining room, two double bedrooms, two bathrooms and a utility room.

Second Floor
At second floor level are a further three bedrooms and two attic rooms.

The Pond Offi ce
The entirely separate building encompasses two main rooms each accessed independently. The first room comprises of a function room with the second room used as a general store but has previously provided staff accommodation and has an adjacent bathroom.

Planning

The property is administered by East Suffolk Council. We understand that the property is Grade II listed but is not situated within a Conservation Area.

EPC

An EPC is in the course of preparation.

Tenure and Tenancy

The property is held freehold.

The Farmhouse, Pond Office plus an additional area of land are all let to Greene King Retailing Limited by way of three separate leases.

The main public house is held on a lease to Greene King Retailing Limited for a term of 99 years from 24 June 1993 at a current rent of £60,000 per annum. This lease will be subject to an upwards only rent review on 24 June 2023 which will be assessed to 40% of market value and reviewed 5 yearly thereafter.

The Pond Office is held on a lease for a term of 10 years from 24 June 2005. The tenant, Greene King Retailing Limited, is currently holding over with the rent payable being £10,000 per annum.

There is an additional lease from 3 March 1998 for an area of land demised to the tenant, for a term co-terminus with the main Farmhouse public house lease. This area is included within the rent payable for the Farmhouse public house.

Covenant

The property is let to Greene King Retailing Limited, which forms part of the wider of Greene King Limited company. The group currently operate around 2,700 locations including brands such as Hungry Horse, Chef & Brewer and Farmhouse Inns.

In their latest accounts which were 12 months to the 2nd January 2022, the company generated revenue of £1.341 billion and adjusted EBITDA of £156.3 million. Prior to the Covid-19 pandemic in the financial year to 28 April 2019, Greene King generated revenue of £2.216 billion and EBITDA of £482 million.

In 2019, CK Asset Holdings completed the acquisition of Greene King for £2.7bn making this one of the
largest portfolio acquisitions in the pub sector.

Greene King Retailing Limited has published the following financial information:

Year:
02/01/2022 - Turnover: £591m (Operating Profit Before Investment - £71m)
03/01/2021 - Turnover: £248m (Operating Profit Before Investment - £97m)
26/04/2020 - Turnover: £856m (Operating Profit Before Investment - £111m)
28/04/2019 - Turnover: £841m (Operating Profit Before Investment - £196m)

Terms

We are instructed to invite offers in excess of £1,250,000 which reflects a blended Net Initial Yield of 5.3% after standard purchasers costs of 6%.

The business will continue to trade unaffected from the premises during the marketing of the property and post completion of the sale.

Viewing

All viewings must be made strictly by prior appointment with Savills and under no circumstances should any direct approach be made to any of the occupational tenants staff.