Pub groups could be heading for one of the biggest changes in their sector’s history after Enterprise Inns said it had been given the go-ahead by the government to convert to a tax-efficient real estate investment trust. Financial Times, The Times, Daily Telegraph, Independent
Shares in the tenanted pub group, with 7,700 establishments, soared 115p or 29% to 510p and pushed stocks up across the sector.
The announcement said that HM Revenue & Customs had told Enterprise that it was eligible to convert to REIT status pending an internal restructuring.
Enterprise said it would continue to analyse the case for REIT conversion, which would take several months. It would be the first pub group to convert to REIT status. The progress of its talks with Revenue & Customs has been closely followed by the rest of the sector, although REITs are thought to favour tenanted rather than managed estates.
Nigel Parson, analyst at Evolution Securities, described yesterday’s announcement as 'massive' and said he expected a substantial re-rating of the industry.