I am a great supporter of both pubs and REITs so it's a bit strange why I can't get excited about the recent stories about various pubs companies announcing that they're going to convert to REIT status.
Lots of other people seem to be doing so and at one point the pub sector seemed to be about to be going through a significant re-rating on the strength of the announcements. After all, pub companies own lots of real estate and their share prices don’t appear to reflect the value of that property – all sounds like a no brainer. Well sorry to be a spoilsport, but lets take a reality check: just as the property companies who converted to REITs have found over the last 18 months, a change in tax status doesn’t change the market in which you operate. It improves your balance sheet, it makes in...
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