Troubled pub group Mitchells & Butlers (M&B) has announced plans to convert to Real Estate Investment Trust (REIT) status, as soon as conditions in the market are “suitable”.

Revealing the results of a comprehensive strategic review, the group will also appoint two non-executive directors from Robert Tchenguiz’s private investment vehicle R20.

The appointments have been seen as the first concrete steps laid on a path that will ultimately look to complete a sale and leaseback of M&Bs property portfolio – estimated to be worth around £6bn.

R20 is currently the group’s largest shareholder with a stake of 27 per cent.

Inline with its strategy review, the owner of the Harvester and All Bar One chains plans to separate its property from its management business, enabling it to use the more tax-efficient REIT scheme to cut its tax bill.

Earlier this year, it was rumoured that private equity companies Blackstone and CVC Capital Partners were looking to take over M&B, which sustained losses of around £422m last year following the failure of a property deal with R20.

The status of being a REIT would convert the group into a property firm which pays no income tax as the majority of its income would be distributed to shareholders as dividends.

REITs are already established in the US, Australia and France, but were only approved in the UK in 2007.