HOTEL INVESTMENT TRAVELODGE LONDON UXBRIDGE, COLHAM HOUSE, BAKERS ROAD, UXBRIDGE, MIDDLESEX UB8 1RG
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HOTEL
INVESTMENT
TRAVELODGE LONDON UXBRIDGE,
COLHAM HOUSE, BAKERS ROAD,
UXBRIDGE, MIDDLESEX UB8 1RG
28 YEAR UNEXPIRED
UPWARDS ONLY
UNCAPPED RPI REVIEWS
Uxbridge Bus and
Underground Stations
UXBRIDGE
Investment Summary • A recently developed (2008), 121 bedroom, town centre hotel located in the centre of Uxbridge directly opposite the main London Underground station. • Strategically located in Uxbridge town centre, a well-established commercial area situated 17 miles west of Central London and within 6 miles of Heathrow Airport. • Let to Travelodge Hotels Ltd from 25th September 2008 with effectively 28.7 years unexpired amounting to 90% of the total income. • Upwards only uncapped Retail Price Index (RPI) linked rent reviews every 5 years. • Low passing rent equating to £4,956 per annum per room. • High average occupancy figures of over 77% year to date. • Ground floor units let to the Metropolitan Police and a Restaurant on leases with upwards only uncapped RPI rent reviews. • The average weighted unexpired lease term is approximately 27.31 years to expiries. • Total rent of £674,391 per annum. • Freehold. • We are seeking offers in excess of £12,141,000 reflecting a net initial yield of 5.25%, having allowed for purchaser’s costs of 5.8%. • Anticipated Reversionary Yield in February 2019 of 5.51%.
LOCATION
Uxbridge is a town in west London and is the administrative headquarters of Uxbridge has two shopping centres, The Pavilions and Intu Uxbridge (formerly
the London Borough of Hillingdon. Uxbridge and Hillingdon have a population The Chimes). Much of the town centre is pedestrianised.
of 26,027 and 273,936 people respectively (Census 2011). Located 15 miles The town centre comprises retail outlets and a number of office buildings,
(24.1 km) west-northwest of Charing Cross, it is one of the major including the main European offices of several international companies
metropolitan centres identified in the London Plan. It is a significant retail and including Canon, PricewaterhouseCoopers and Apple. Other employers in the
commercial centre, and is the location of Brunel University and the Uxbridge area include General Mills, Coca-Cola and F Hinds.
campus of Buckinghamshire New University. A
M40 4 29 A127
A404 1 A127
16 1
A40 A41
A406 A10
SOUTHEND ON SEA
9B M25
UXBRIDGE LONDON 1 1
M25
A13
A40 A13 A13
A5 A13
M4
8 15 4 31
5 M4 2 1 A102
A2
A4 A205
HEAAT
HEATHROW
M4 14
AIRPORT
A IRP
RP A205 M25
A23 A2
A307
13 A205
10 A3 A20
2 A2
1
A23
A309 A20
2/12
1
M3
A322 3
1
2
M3
A240
A232
A232
GILLINGHAM
M25 A232 M25
3 M20
A3 A21 4 A228
A243 3
A24 M2 5
10
4 9 2 A229
M25 A23 4
M3
WOKING 9
A217 A22 M26 A20
5
LEATHERHEAD 5 6
7
8 A25
A331
M25 M20
A3 M25 A228
7
A24 8 6 A21 MAIDSTONE
A229
A31 A26
A22
A31
A21
A228
A24
A3
A21
G ATW
AT
GATWICK 9 ROYAL TUNBRIDGE A229
AIRPORT
AIRP A264 WELLS
1
1 Heathrow Airport
2 Harman House
3 Coca Cola M25
Enterprises
4 M4 15
4 Intu Uxbridge
5 Charter Place
WEST DRAYTON
6 Prezzo STATION
7 The Pavilions
A437
UXBRIDGE ROAD
A408
A4020
Subject
Property
D CH OX
ROA IPP FO
RK EN RD
PA DA RO
LE
WA UXBRIDGE AD
YE
N LINE
PICCADILLY LIN
E POLITA
METRO
2 3 4 5 6 7
TRAVELODGE LONDON
UXBRIDGE HOTEL
BAKERS ROAD, UB8 1RG
SITUATION COMMUNICATIONS
The property is in an unrivalled location in the centre of Uxbridge. Colham ROAD
House is located on Bakers Road, directly opposite Uxbridge Underground The town has excellent road connections being equidistant from the M40
Station in the centre of Uxbridge Town Centre. Oxford Road (A4020) connects motorway (J1) and the M25 (J16) and the A40 Western Avenue. The main
directly to Junction 1 of roads serving Uxbridge include the A40 providing direct access to Central
RD ROAD
the M40 to the North Travelodge
London to the east and the M40 to the north.
67
which connects directly to London
HIG
B4
AD
RO Uxbridge Hotel
RAIL
H
the M25 at Junction 16. N
T
ST
O
M L
Uxbridge tube station is the western terminus for the Metropolitan and
CH
BE
RE
ET
IPP
BA
Piccadilly lines of the London Underground providing direct access into central
KE
EN
RS
DA
London via London's Kings Cross and Liverpool Street stations with a fastest
RD
LE
T
D
OX
N
W
O
A AY
E M
O journey time of 47 and 54 minutes respectively.
FO
RR
RD
Denham, South Ruislip and West Drayton Overground rail stations are located
STA
RO
R E
approximately 4 miles from Uxbridge and can be reached in circa
AD
A40
KDSSOP
10 minutes. These stations provide direct access into London Marylebone
EWAIN
Pavilions Shopping Centre Intu Shopping Centre (23 minutes), London Paddington (29 minutes) and Reading (39 minutes).
BR
West Drayton will form one of the Crossrail Stations set to open in 2018.
B467 This will result in journey times to Tottenham Court Road of circa 24 minutes.
M40 1 AIR
G LANE
The town centre is 15 minutes from London Heathrow Airport by road and
OX
UXBRIDGE Gatwick Airport can be reached in approximately 50 minutes. Both airports
F
N
OR
AD
offer excellent connectivity to domestic and international terminals. Uxbridge
LO
A40
D
RO
is also well served by buses and provides direct access to Heathrow Airport
RO
S
D
within 18 minutes via the 724 and A10 bus routes.
7
K R OAD
AD
N
6
B4
LA
H
UT
SO A40
P AR
Uxbridge
Station
D
COWLEY ROAD
OA
A4020
HNS R
S T JO
A437
KIN
M25
G
UX
ST
A43
BR
ON
ID
7
GE
LN
RO
70
DESCRIPTION TRAVELODGE UXBRIDGE TRADING HISTORY
The property was built in 2008 and comprises a purpose built 121 bedroom The hotel has experienced an improved performance compared with 2013 with
budget hotel with ancillary office and restaurant units on the ground floor. It is the revenue per annum per room up by £1.17 to £40.14. The rack rate per
arranged over 9 floors, providing a total GIA of 43,050 sq ft (4,000 sq m) and room is up £7.88 to £51.85 year to date. In effect the hotel is selling each room
has been constructed using an innovative prefabricated modular construction at a higher rate than last year. The hotel has a high occupancy rate of 77.4% in
system which has since been replicated in a number of other locations in the the year to date.
UK. The property has a mixture of brick cladding and rendered elevations
interspersed with powder coated aluminium fenestration. The property has NEW DEVELOPMENT
recently benefited from a full Travelodge refurbishment programme which
Travelodge are rolling out across their portfolio following the CVA. The neighbouring property on Bakers Road, currently known as Norwich Union
House has full planning permission to erect a 9 storey building comprising retail
The ground floor houses the main entrance to the Travelodge hotel, as well as floorspace at ground floor level and 8 storeys of residential units (37 units) with
a Brazilian style restaurant let to Nabrasa and an office let to the Metropolitan associated gym, access and parking arrangements. The planning reference is
Police who operate the building as a community police station. 8218/APP/2011/1853. The image below provides an indicative elevation of the
proposed development.
SITE
The property is on a site of approximately 0.25 acres (0.1 hectares).
South West Elevation North West Elevation
TRAVELODGE LONDON
UXBRIDGE HOTEL
BAKERS ROAD, UB8 1RG
TENANCIES
The property is fully let on three leases in accordance with the tenancy The ground floor office is let to the Mayor’s Office, occupying the space as a
schedule. The total rental income is currently £674,391 per annum and community police office, on full repairing and insuring terms until December
provides a weighted unexpired lease term of 27.31 years to lease expiries. 2019 at a passing rent of £34,650 pa, equating to £9.63 psf. The tenant has not
The hotel element is let to Travelodge Hotels Ltd on full repairing and insuring exercised their 2014 break option.
terms for 35 years expiring July 2043 and incorporates 5 yearly uncapped, The ground floor restaurant is let to Nabrasa on full repairing and insuring
upward only rent reviews linked to the Retail Price Index (RPI). The rent terms until February 2039 at a passing rent of £40,000 pa equating to £19 psf.
passing is currently £599,741 pa which reflects a low room rate of £4,956 per The rent is reviewed 5 yearly, on an upwards only basis linked to the RPI index
bedroom. The hotel accounts for 90% of the total income for the property. with no caps on the upper limit.
TENANT DESCRIPTION UNIT SIZE LEASE EXPIRY UNEXPIRED TERM PASSING RENT RENT PSF/PK RENT REVIEWS
Travelodge Hotels Ltd Hotel 37,350 (121 rooms) 31/07/2043 28.82 599,741 £4,956 5 yearly U/O RPI reviews
Mayor’s Office Office 3,600 13/12/2019 5.18 34,650 £9.63 5 yearly U/O RPI reviews
Nabrasa Restaurant 2,100 09/02/2039 24.35 40,000 £19 5 yearly U/O RPI reviews
Totals 43,050 27.32 674,391
The current 5 year RPI Swap rate is 3.02%. Applying the actual RPI rates to Based on the above the total rent after the next rent reviews for all three
date and the 5 year RPI Swap rate of 3.02% until the next review the tenants in 2019 is forecast to be £707,666 pa.
Travelodge rent is forecast to rise to £620,283 in 2018.BUDGET HOTEL OCCUPATIONAL MARKET
The subject property is let at an annual room rate of £4,956. The comparable evidence below highlights that the current passing rent of the subject property
is considerably below market rental value for a property of this nature in this location.
DATE RENT PER
ADDRESS TENANT EXPIRY ROOMS RENT PA COMMENTS
OPENED ROOM
Charles Street, Off Crossways Boulevard,
Travelodge Hotels Ltd Aug-01 08/05/2049 65 rooms £417,207 £6,419 5 yearly RPI linked uncapped reviews.
Dartford
The Beehive, Beehive Ln, Gants Hill,
Travelodge Hotels Ltd Sep-94 08/08/2039 32 rooms £250,000 £7,813 5 yearly RPI linked uncapped reviews.
Ilford, Essex
21/23 Old London Road, 2015 - 2.5% annually compounded.
Travelodge Hotels Ltd Sep-02 08/08/2049 72 rooms £519,729 £7,218
Kingston Upon Thames, London, Surrey Uncapped 5 yearly thereafter.
A40 Western Avenue, Acton Travelodge Hotels Ltd Apr-99 08/05/2049 64 rooms £408,427 £6,382 5 yearly RPI linked uncapped reviews.
BUDGET HOTEL INVESTMENT MARKET
The hospitality market continues to attract investor demand for well let Greater London hotels. The development pipeline over the next 2-3 years is expected
to support and underpin this value enhancement with the Greater London sub-market having become increasingly attractive to investors. Outlined below are some
relevant investment transactions.
INVESTMENT COMPARABLES
PRICE TOTAL RENT ROOM
ADDRESS DATE NIY ROOMS WAULT COMMENTS
ACHIEVED (£) PASSING RENT PA
19-31 Piccadilly Gardens, Multi-let to Morrisons, Nando’s, ASK and
u/o £23.1m 4.84% 175 rooms £1,183,650 pa £3,992 21.5 years
Manchester Travelodge (60% of the income). RPI linked RR.
Includes Bar Café.
High Street, Stratford, London Oct-14 £18.2m 5% 188 rooms £963,500 pa £5,125 23 years
5 yearly uncapped RPI RR.
Lumina Park, Great Cambridge
Jun-14 £10m 5.5% 132 rooms £519,849 pa £3,938 33 years 5 yearly uncapped RPI RR
Road, Enfield, LondonTRAVELODGE LONDON
UXBRIDGE HOTEL
BAKERS ROAD, UB8 1RG
TENANT COVENANTS TENURE
TRAVELODGE HOTELS LIMITED (0769710) Freehold.
Travelodge opened their first hotel in 1985 and are now the second largest
hotel brand in the UK, with over 500 hotels, 36,722 rooms and over 6,000 PLANNING
employees in the UK, Ireland and Spain. More than 16.5 million people stayed The subject units benefit from Use Classes C1.
with Travelodge last year and 85% of reservations are currently made online
at www.travelodge.co.uk, which is one of the UK's top five most visited travel EPC
websites, attracting over 1.1 million visits each week. The property benefits from an EPC rating of B - 40.
On 12 October 2012, ownership of Travelodge transferred from Dubai
International Capital to three of the company’s key investors; Golden Tree CAPITAL ALLOWANCES
Asset Management, Avenue Capital and Goldman Sachs. The vendor will seek to retain all available capital allowances and as such none
Under the terms of the financial restructuring, Travelodge’s net debt was will be available to the purchaser.
reduced from £1,111m to £331m. In addition, £75m of new equity has been
injected into the business, allowing for a major refurbishment and upgrade of VAT
the estate. More than £55m of this equity is being invested in a major
We understand the property has been elected for VAT which will therefore be
refurbishment of the portfolio and at the end of 2013, a further £20m of funds
chargeable on the sale price unless the transaction can be treated as a Transfer
was allocated to increase the speed of the rollout with over 80% of bedrooms
of a Going Concern (TOGC).
to be refurbished by the end of 2014.
The Travelodge business has improved significantly since completion of the PROPOSAL
CVA. This has resulted in a significant overhaul of the estate with the majority
We are seeking offers in excess of £12,141,000 for our client’s freehold
of the hotels being refurbished. Occupancy is currently circa 80.3% which is a
interest in the property subject to contract. A purchase at this price reflects a
4.70% increase from 2012. Turnover up until December 2013 was £426.4
net initial yield of 5.25% having allowed for purchaser’s costs of 5.8%.
million which is an increase of 9% from the previous year.
31 DEC 2011 (£) 31 DEC 2012 (£) 31 DEC 2013 (£)
WEB ACCESS
www.cushmanwakefieldinvestmentsales.co.uk/cw/uxbridge
Turnover 369,500,000 391,400,000 426,400,000
Profit before tax (26,900,000) (71,100,000) 37,300,000
Net Worth 735,600,000 616,400,000 673,800,000www.cushmanwakefield.com FURTHER INFORMATION: MIKE BURDEN NICK DUFEU ZAC BARNETT Tel: 0207 152 5086 Tel: 020 7152 5230 Tel: 020 7152 5091 Email: mike.burden@eur.cushwake.com Email: nick.dufeu@eur.cushwake.com Email: zac.barnett@eur.cushwake.com CUSHMAN & WAKEFIELD LLP 43/45 Portman Square London W1A 3BG November 2014 CUSHMAN & WAKEFIELD LLP MISREPRESENTATION ACT 1967 Cushman & Wakefield LLP (and their joint agents if appointed) for themselves and for vendors or lessors of this property whose agents they are, give notice that: (1) The particulars are produced in good faith, are set out as a general guide only and do not constitute any part of a contract. (2) No person in the employment of the agent(s) has any authority to make or give any representation or warranty whatever in relation to this property. (3) This property is offered subject to contract and, unless otherwise stated, all rents are quoted exclusive of VAT. (4) Nothing in these particulars should be deemed to be a statement that the property is in good condition or that any services or facilities are in working order. (5) Unless otherwise stated, no investigations have been made regarding pollution or potential land, air or water contamination. Interested parties are advised to carry out their own investigations if required. Photography, Print & Production by Plus Art Ltd 0115 972 4000
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