Coventry just gets better - Prime Mixed Commercial and Residential Investment Phase 2a Belgrade Plaza, Coventry, CV1 4AH - Fastly
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www.belgradeplaza.co.uk
Prime Mixed Commercial and Residential Investment
Phase 2a Belgrade Plaza, Coventry, CV1 4AH
Coventry just gets better 1
Investment
overview
• An opportunity to acquire a prime modern mixed-use commercial
and residential investment.
• Located in Coventry City Centre, the second largest city in the West
Midlands, and one of the best performing cities in the UK (Cities
Outlook 2015).
• The property comprises a 119 room Premier Inn, JD Gym, Bella
Italia, Café Rouge, Pizza Express and 64 apartments held on ASTs.
• Substantial investment underway and planned in the immediate
vicinity which will enhance value.
• Long leasehold with circa 139 years unexpired at a current rent of
£64,371 per annum.
• The total current net rental income, including vendor guarantees, is
£1,281,880 per annum (net of ground rent).
• Commercial element accounts for 55% of the total income with a
WAULT of circa 13.7 years (7.7 years to breaks).
• The 64 apartments comprising 30 one bed and 34 two beds, let on
standard ASTs with the ability to be sold off individually.
• Offers in excess of £17,800,000 (Seventeen Million Eight Hundred
Thousand Pounds) providing a net initial yield of 6.75%, after the
deduction of the ground rent.
2
A50 A52 25
A34 A50
24
14
Coventry The
STAFFORD BURTON UPON TRENT 23A
A51
RAIL TIMES NORTH
Birmingham New Street 22 mins M6
Leicester 50 mins A38 A42 M1
Derby 79 mins
Manchester Piccadilly 122 mins
heart of the UK
Sheffield 123 minsA5 12 CANNOCK LICHFIELD
Leeds 170 mins
11A M42
A5 A51 LEICESTER
M54 10A TAMWORTH
M6toll
3
M6 10 21
M69
8 A5
Coventry is a cathedral city located at the heart A38 9
6 1
of the UK and with a population of 337,400 is the M6
M1
second largest city in the West Midlands and the BIRMINGHAM 7
BIRMINGHAM 7A 3A
A45 INTERNATIONAL
3
M5 6
11th largest in the UK. DISTANCE FROM AIRPORTS
Birmingham 10 miles or 16.1 km
A38
M42
A45
A4114
A444 2
M6
East Midlands Airport 42 miles or 67.6 km
A4600
COVENTRY 19
The city lies approximately 19 miles (30.6 km) to
A46
Coventry Airport 4.9 miles or 7.9 km A45 A4114
A45
the south east of Birmingham and 96 miles (154.5 4A COVENTRY
M42 3A
A45
A46
M45 17
km) to the north west of London. M5 M40
M1
15
Rail: Coventry railway station is located in the city centre
and offers excellent national rail connections via the M69/M1 NORTH
Leicester 39 mins
West Coast Mainline. Direct rail services are available Derby 61 mins
Sheffield 104 mins
to London Euston with a fastest journey time of 64 Leeds 133 mins
minutes, to Birmingham International in 10 minutes, and to
M6 LINK NORTH
Birmingham New Street in 22 minutes. Manchester 124 mins
Road: Coventry is strategically located at the centre of the
national motorway network. The city is in close proximity M6
to J2 and J3 of the M6, J1 of the M69, J6 of the M42 and Birmingham 34 mins
Y
CO
J15 of the M40 motorways. This allows rapid access to
VE R
VE R
NT
NT
the full national motorway network serving the Midlands CO
Y
conurbations and beyond.
A14 EAST ANGLIA,
CHANNEL PORTS
165 mins
Airport: Coventry Airport is located to the south of the city London
close to the A45/A46 junction and serves as an important
freight and private airport within the region. Birmingham
Airport is 10 miles (16.1 km) to the north-west and has a
direct train connection with Coventry railway station from M45/M1 SOUTH
Birmingham International. Birmingham Airport is the third Northampton 53 mins
Milton Keynes 57 mins BIRMINGHAM
largest airport in the UK outside London, seventh largest RAIL TIMES SOUTH
Euston 64 mins
London 118 mins AIRPORT
Brussels 75 mins
overall and served over 10 million passengers in 2015. The Northampton 35 mins Edinburgh 70 mins
Milton Keynes Central 32 mins Glasgow 70 mins
East Midlands Airport is 42 miles (67.6 km) to the north. Amsterdam 80 mins
3
Leading the way
Coventry is the Coventry and Warwickshire forecast
population growth of
best performing
Midland's city overall. 80,000 by 2021. Coventry is the heart of the British
The city is home to two leading
universities; Coventry University
motor industry and home to the UK and University of Warwick, with a
6th
headquarters of Jaguar Land Rover combined total of circa
46,500
and Peugeot Citroen.
Ranked nationally over
the last decade for private sector The Friargate development is
growth underway and is set to provide 3.2 students. They play a
million sq ft of mixed use space, Jaguar Land Rover has announced
7th
significant role in the local
creating up to plans for the next phase of a £500 economy and expect to
15,000
and for total jobs million investment plan around its grow significantly over the
growth. Whitley headquarters potentially
jobs. next few years.
creating up to
6,000
98% of the UK market
(consumers and businesses)
Coventry is a vibrant centre for
culture offering a variety of attractions
new jobs for the area.
Coventry University was voted
is within a four hour drive. and ventures and is bidding to become modern university of the year 2015 by
the Sunday Times, is ranked 27th in
UK City of Culture Coventry is home to major occupiers
the Guardian university league table,
2021. including
and contributes circa
£150 million
Coventry is undergoing a
Barclays
£9 billion Visitors spent
Coventry Building Society
Ericsson to the city economy.
programme of investment E.ON
with potential to create over
£344 million Jaguar Land Rover
Peugeot Citroen
The University of Warwick is
ranked 6th in the Guardian university
70,000 in the city in 2012 with day trips
accounting for £200 million and £144
Sainsbury’s
Severn Trent
league table and 48th in the QS
world university rankings. 87% of its
new jobs. million from overnight trips. Tui research is classed as world-leading
and internationally excellent.
Information sources: Coventry City Council, Cities Outlook 2015, Visit Coventry and Warwickshire. 4
Belgrade Plaza is a circa £125 million mixed-use project situated
to the northwest side of the city centre. It lies adjacent to the Ring
Road (A4053) and is within 150m of the retail core including the
West Orchards and Precinct shopping centres.
Phase 2a is the principal commercial development within Belgrade Plaza
comprising a 119 room hotel, four ground floor restaurants/retail units, first floor
gym and 64 apartments (63 fully furnished). It is prominently located at the front
of Belgrade Plaza and benefits from excellent accessibility off Upper Well Street
via the roundabout junction with the Ring Road. The development is also supported
by three bus stops along Upper Well Street. The railway station is within a 10 to
15 minute walk to the south.
The Belgrade Theatre is immediately to the south and is one of Warwickshire’s
principal venues for community and self-produced shows including concerts.
The theatre was extended and refurbished in 2007 to provide a second auditorium
and has a capacity of 1,158. In 2015 it attracted circa 150,000 visitors.
The award-winning Belgrade Plaza multi-storey car park is located to the west
and provides circa 1,100 spaces. It was refurbished and extended in 2006/2007.
The site immediately to the west, known as Phase 3, is being developed by
Downing Group for a 600 room, 20 storey student scheme which will include
557 sq m (6,000 sq ft) of ground floor A3/A4 leisure use and 40 apartments.
Ground works are underway and practical completion is anticipated before
the start of the 2017/2018 academic year.
Phase 2b is currently under offer to Downing Group for a combined 80 room hotel,
385 student rooms and 100 residential apartments.
There is a significant amount of student accommodation development underway
or planned within the general area, with over 2,000 rooms set to be delivered
over the next few years. This combined with other major inward investment
projects is expected to have a huge positive impact on local businesses
and the residential market.
5
(Phase 2b)
1. Belgrade Plaza
2. Coventry University
3. Belgrade Theatre
4. The Herbert (Arts)
5. Friargate
6. IKEA (Phase 2a)
O SS
7. Retail Core ILL
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Skills Funding
Agency HQ
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6
Aerial view
Coventry Upper Precinct Lower Precinct Ringway
Railway Station Shopping Centre Shopping Centre IKEA Sky Dome Junction 8
Phase 2A Ring Road Junction 9
West Orchards Belgrade Theatre
Shopping Centre
7
Description Ground Floor 1st Floor
The property is a very high quality mixed used development completed
in 2008/2009. It comprises a 119 room hotel, four flexible restaurant/
retail units, a gym, and 64 (63 being fully furnished) one and two bedroom
apartments.
The seven-storey building is of concrete frame construction with
solid concrete floors. The elevations comprise a mixture of brick, 2nd - 5th Floor 6th Floor
sheet cladding to the upper levels and extensive full height glazing to
commercial units at ground and first floor level.
The “U-shaped” building provides four restaurant/retail units at ground
floor together with the reception lobbies for the hotel, residential
apartments and the first floor gym. The hotel is located above the gym
over-looking Upper Well Street. The apartments are located at the rear
overlooking Phase 3.
PHASE 2A 7th - 8th Floor
JD Sports Gym
Premier Inn Hotel
Bella Italia
Cafe Rouge
Pizza Express
Residential
Vacant Unit
8
Tenure
The property is held on a long lease for a term of 150 years from
20 May 2005 at a current rent of £64,371 per annum, subject to
annual upward only increases linked to the Retail Price Index.
Tenancy schedule
Tenant Lease Start Lease Expiry Rent Reviews Break Option Floor Area Rent Rent (£/pa) Comments
(L/T) (Sq Ft) (£/Sq Ft)
JD Sports Gyms Limited 26/10/2015 24/10/2030 26/10/2020 26/10/2025 (T) 26,385 £6.63 £175,000 The lease is guaranteed by JD Sports
26/10/2025 Fashion Plc on a rolling two year basis.
Service charge capped at £20,000 per
annum.
Bella Italia Restaurants Limited 24/06/2009 23/06/2024 04/03/2019 2,744 £22.41 £61,500
Café Rouge Restaurants Limited 25/12/2012 24/12/2027 25/12/2022 4,433 £15.79 £70,000 Stepped annual rent increases to
£70,000 per annum at year six. This will
be topped up by the vendor.
Pizza Express (Restaurants) Limited 25/12/2008 24/12/2033 25/12/2018 24/12/2023 (T) 3,500 £20.00 £70,000
25/12/2023
25/12/2028
Vacant 4,506 £15.53 £70,000 Vendor two-year rent, rates and
service charge guarantee.
Premier Inn Hotels Limited 29/09/2008 28/09/2033 10/11/2018 29/09/2023 (T) 119 rooms £2,450 per room £291,550 Open market rent reviews to reflect
10/11/2023 landlord shell specification.
10/11/2028
Apartments held on AST's 64 apartments £9,408 per £608,201 Fully income producing as at April 2016.
apartment Rent is net of management costs.
Total £1,346,251
Net of ground rent £1,281,880 Ground rent currently £64,371 pa
9
Income analysis All commercial tenants are national multiples
JD Sports Gyms Limited A summary of the company’s trading information is as follows:
Creditsafe Rating: 23
JD Gyms offers exceptional fitness facilities in prime 31 January 2015 - -
city centre locations for affordable prices. JD Gyms Turnover £ 514,000 - -
launched in 2014 and now operates five gyms with
a sixth opening shortly. Pre-Tax Profit £ -212,000 - -
The Coventry gym opened in January 2016 and
Shareholders Funds £ -165,000
operates between 6am and 10pm Monday to Friday
and 8am to 8pm Saturday and Sunday. The gym
For further information visit www.jdgyms.co.uk
already has over 5,000 members.
Premier Inn Hotels Limited A summary of the company’s trading information is as follows:
Creditsafe Rating: 90
Premier Inn is the largest hotel brand in the UK with over 700 hotels in the
26 February 2015 27 February 2014 28 February 2013
UK and 59,000 rooms. The company is targeting 85,000 rooms by 2020.
Turnover £ 374,540,000 288,681,000 201,014,000
Internationally, it has five hotels in the Middle East and three in India, with
further developments in the pipeline and a target for 50 international hotels Pre-Tax Profit £ 148,523,000 75,494,000 44,568,000
by 2018.
Shareholders Funds £ 751,872,000 636,984,000 578,080,000
For further information visit www.premierinn.co.uk
Pizza Express Restaurants Limited A summary of the company’s trading information is as follows:
Creditsafe Rating: 90
Pizza Express is a restaurant group with over 400
28 June 2015 29 June 2014 30 June 2013
restaurants across the UK and 40 overseas in Turnover £ 382,942,000 351,658,000 334,619,000
Europe, Hong Kong, India and the Middle East. It
was founded in 1965 by Peter Boizot. In July 2014 Pre-Tax Profit £ 76,365,000 67,901,000 61,279,000
the group was sold to the China-based private
equity firm Hony Capital. Shareholders Funds £ 525,263,000 452,376,000 439,591,000
For further information visit www.pizzaexpress.com
10Income analysis continued
Bella Italia Restaurants Limited A summary of the company’s trading information is as follows:
Bella Italia is a chain of over 80 Italian
1 June 2014 2 June 2013 27 May 2012
restaurants operating in the UK. The Turnover £ 74,433,000 72,172,000 68,078,000
company is owned by Casual Dinning
Group, one of the largest independent Pre-Tax Profit £ 4,680,000 8,008,000 13,145,000
restaurant companies in the UK.
Shareholders Funds £ 82,606,000 77,250,000 69,187,000
For further information please visit www.bellaitalia.co.uk
Café Rouge Restaurants Limited A summary of the company’s trading information is as follows:
Café Rouge was launched in 1989 in 1 June 2014 2 June 2013 27 May 2012
Richmond, London, to recreate real
French food and wine in a Parisienne Turnover £ 116,691,000 117,722,000 113,395,000
bistro style setting. It now has 120
restaurants located throughout the Pre-Tax Profit £ -2,760,000 5,932,000 7,468,000
UK. The company is owned by Casual
Shareholders Funds £ 74,185,000 74,848,000 69,415,000
Dinning Group, one of the largest
independent restaurant companies in
the UK. For further information please visit www.caferouge.com
11Income analysis continued
Commercial Income Split
Commercial income split
Commercial Income Split Commercial Income Split
AnnualAnnual
residential
Residential Rent
Annual Residential Rent
rent
Annual Residential Rent £746,640
JD Sports Gyms Limited
9%
£677,460 £746,640
JD Sports Gyms Limited £746,640
24% 9% JD Sports
Premier InnGyms Limited
Hotels Limited £626,520 £677,460
9% 9% £574,080 59%
24% Premier Inn Hotels Limited £626,520 £677,460
9% £543,960 59%Growth
24% Premier
Bella InnRestaurants
Italia Hotels Limited
Limited £507,360
£525,660
£543,960
£574,080 £626,520
9% £470,760 £525,660 Growth
59%
Bella Italia Restaurants Limited £507,360 £574,080
10% £470,760 £543,960 Growth
£525,660
10% Bella Rouge
Café Italia Restaurants
RestaurantsLimited
Limited £507,360
Café Rouge Restaurants Limited £470,760
10%
Café Rouge
Pizza Restaurants
Express Limited
(Restaurants)
Pizza Express Limited
(Restaurants) Limited
8% 8%
Pizza Express
Vacant Vacant - Guarantee
(Restaurants)
- Guarantee Limited
8% 40% 40%
Vacant - Guarantee
40%
2009 2010 2011 2012 2013 2014 2015 Current Rent
2009 2010 2011 2012 2013 2014 2015 Current Rent
2009 2010 2011 2012 2013 2014 2015 Current Rent
IncomeIncome
splitSplitwith apartments
Income Split with Apartments
As of April 2016, the 64 apartments are fully income
with Apartments producing. They are held on ASTs and produce a gross
£716,400
Income Split with Apartments JD Sports Gyms Limited annualised rental income of £746,640.
13% Gross Rental Income £716,400
£145,510
Premier Inn Hotels Limited
JD Sports Gyms Limited
There areNet14 one bed apartments now achieving £850 per
Rental Income
£716,400
13% Bella Italia Restaurants Limited
calendar
Gross Rental Income and 16 two bed apartments achieving £1,200
month £145,510
Management Costs
JD Sports
InnGyms Limited
45%
22%
Premier Hotels Limited perNet
calendar
Rental
Gross Income
Rental
month.
Income
13% Café Rouge Restaurants Limited
£145,510
Premier
Bella InnRestaurants
Italia Hotels Limited
Limited
Pizza Express (Restaurants) Limited
These levels
Management
Net Rental equate to a gross annual rental value of £795,000,
Costs
Income
45% £570,890
22% Bella Rouge
Café Italia Restaurants
RestaurantsLimited
Limited
demonstrating genuine rental growth potential.
5% Vacant - Guarantee Management Costs
45%
22%5% 5%
5%
Café Rouge Restaurants
Management costs for the apartments currently runs at £138,439
Pizza Express ApartmentsLimited
(Restaurants) Limited £570,890
per annum, producing a net income of £608,201 and a potential
5% Pizza Express
Vacant (Restaurants) Limited
- Guarantee net reversionary rental value of £656,561
£570,890 .
5%
5% 5% 5% Vacant - Guarantee
Apartments
5%
5% 5%
Apartments
12Market analysis
Hotel & Leisure Market Residential Market
Coventry’s main leisure attractions are located on the west and northern One in five households in the UK are now privately rented and the growing
side of the city centre and at the edge of the retail core. These include imbalance between demand (230,000 new households per annum) and
Belgrade Plaza, Coventry Transport Museum, the Sky Dome Arena and
supply (less than 110,000 completions in 2014) makes the private rented
Leisure World. There are various national and independent bars and
restaurants spread out across this area with the principal cluster being in sector a desirable asset class.
the vicinity of Belgrade Plaza. The well-established MSCI/IPD UK residential index has shown strong
There are nine hotels within the city centre and there is a recognised lack performance over the last three years with annual returns of 12% with a
of bed stock particularly in the quality budget and high-end markets. We 10-year average of 9.9%.
understand that average occupancy rates across the local market are circa
70%. The Premier Inn at Belgrade Plaza is rated as an outstanding hotel According to Zoopla the average house price in Coventry has increased by
with a high occupancy rate. an estimated 20% over the last five years from circa £149,000 to £179,000.
Coventry is benefitting from a high level of economic development and a The average vacant possession value of one and two bed city centre
growing profile as a city for business, culture, education and innovation. apartments is estimated at £110,000 and £150,000 respectively. The subject
This will fuel demand from occupiers and provide opportunities for growth property is regarded as the best residential development in central Coventry
in the leisure sector. and would expect to achieve values above these levels, particularly given its
Prime leisure yields are now in the region of 5.0% to 5.5% and therefore position in the city centre and proximity to Coventry University.
the subject property offers exceptional value.
With forecast population growth of 80,000 by 2021 and the continued
expansion of the local universities and major employers there is likely to be
significant pressure on supply. Investors are therefore expected to benefit
from excellent prospects for further capital and rental growth.
Asset management
•
Benefit from development in the immediate area which is •
Re-gear the commercial leases, removing the break clauses to extend
expected to enhance trading potential for the commercial the WAULT.
elements and demand for the residential apartments.
•
Continue to benefit from rental growth from the apartments and reduce
•
Let the vacant unit at ground floor to improve the WAULT, management costs to enhance net rental income and capital value.
provide rental evidence to support growth at the other units, and
•
Opportunity to sell apartments to investors and owner occupiers to
enhance value.
realise premium values.
13VAT
We understand the commercial element is elected for VAT. It is intended that
this part of the sale will be treated a Transfer Of a Going Concern (TOGC).
We understand the residential element is not elected for VAT.
Proposal
We are instructed by our clients to seek offers in excess of £17,800,000
(Seventeen Million Eight Hundred Thousand Pounds) subject to contract
and exclusive of VAT.
An acquisition at this level would reflect a net initial yield of 6.75% after
allowing for purchaser’s costs of 6.74%.
EPC
EPCs are available upon request.
Capital Allowances
Capital allowances are available and further information can be
provided upon request.
Information please contact
Jonathan Hillcox
Direct Line: 0121 609 8426
Email: jonathan.hillcox@gva.co.uk
Damian Lloyd
Direct Line: 0121 609 8223
Email: damian.lloyd@gva.co.uk
Bilfinger GVA
3 Brindleyplace
3 Brindleyplace gva.co.uk Barry Riley Bilfinger GVA is the trading name of GVA Grimley limited, conditions under which particulars are issued by GVA Grimley Limited for themselves,
Birmingham
BirminghamB1 2JB /00000 Direct Line: 0121 609 8268 for any joint agents and for the vendors or lessors of this property whose agents they are, give notice that: (i) the particulars are set out as a
general outline only for the guidance of intending purchases or lessors and do not constitute, nor constitute part of, an offer or contract. (ii) all
B1 2JB Email: barry.riley@gva.co.uk descriptions, dimensions, references to condition and necessary permission for use and occupation, and other details, are given in good faith and
0121 236 8236
are believed to be correct but any intending purchasers or tenants should not rely on them as statements or representations of fact but satisfy
themselves by inspection or otherwise as to the correctness of each of them. (iii) no person in the employment of GVA Grimley Limited or any
Tel: 08449 02 03 04 Alex Darlington joint agents has any authority to make or give any representation or warranty whatever in relation to this property. (iv) all rentals and prices are
quoted exclusive of VAT. (April 2016)
Fax: 0121 609 8314 Direct Line: 0121 609 8325
Reproduced by courtesy of the Controller of HMSO Crown Copyright reserved. Licence No 774359. If applicable, with consent of Chas E Goad,
gva.co.uk/9783 Email: alex.darlington@gva.co.uk Cartographers, Old Hatfield, Geographers A-Z Map Co Ltd and/or The Automobile Association. For identification purposes only.
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