LAKESIDE POINT MANSFIELD ROAD, SUTTON-IN-ASHFIELD - Retail and Leisure Investment Opportunity 56% Long Income Travelodge with RPl-linked Rent ...
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LAKESIDE POINT
MANSFIELD ROAD, SUTTON-IN-ASHFIELD
MANSFIELD NG17 4HG
Retail and Leisure Investment Opportunity
56% Long Income Travelodge with RPl-linked Rent Reviews
MANSFIELD
KING’S MILL HOSPITAL
A38
KINGS MILL ROAD
LAKESIDE POINT
a
PAPER MOON NURSERY
SUTTON-IN-ASHFIELD
B6023 MANSFIELD ROAD
Annotation to be provided
Executive Summary
• Fully let neighbourhood retail and leisure
scheme, prominently located close to Kings
Mill Hospital.
• 56% of the income is let to Travelodge for
19.5 years, (subject to landlord right to
extend the lease) with the benefit of open
market rent or RPI linked rent reviews,
whichever is the higher.
• WAULT of 13.80 years to expiry (11.96 years
to break assuming Travelodge lease has
been extended).
• 95% of income let to national brands.
• The Travelodge rent will be topped up to
£199,299 per annum, based on actual ONS
RPI data to September 2018. Therefore, the
total scheme rent is £344,441 per annum.
• There will be an opportunity for a further
Travelodge rental increase in 2020
estimated at £211,908 per annum, based on
the ONS RPI forecast data.
• Market and reversionary rents throughout
with Travelodge rent reflecting a low
average rent of £3,986 per key.
• We have been instructed to seek offers in
excess of £5,100,000, subject to contract
and exclusive of VAT reflecting a NIY of
6.34% assuming standard purchasers costs
of 6.59%. Reflecting a low capital value of
£192 psf.
• Based quoting price and using actual and
forecasted RPI data from the Office of
National Statistics (ONS), the anticipated
running yield at the next Travelodge review
(2020) is 6.57%.
Location
Mansfield is located to the east of the M1 motorway in close proximity
to Junctions 27-29 and has excellent transport infrastructure. The
M1 serves Mansfield at Junctions 27, 28 and 29 providing excellent
links to both the North and South of the country. The area’s central
position means that majority of the country can be accessed within a
3 hour drive.
The Robin Hood railway line connects Mansfield with Worksop (to
the north) and Nottingham (to the south). Nottingham offers direct
service to cities across the country including London St Pancras.
Phase 2 of the high-speed rail network (HS2) which will link the
West Midlands to Manchester and Leeds may also bring future
opportunities.
East Midlands Airport is only 30 miles away with many other airports
across the country within easy traveling distance.
The subject property benefits from a 20-minute drive time catchment
population of approximately 329,000 people. The population
demographics show that within the given catchment area there are
a greater number of persons in full-time employment than the UK
average.
Situation
The scheme is situated on Mansfield Road (B6023) which lies approximately 1.3
miles north-east of Sutton-in-Ashfield and approximately 2.6 miles south-west of
Mansfield.
The immediate surroundings comprise mainly residential dwellings with a large retail
warehouse, The University of Nottingham (44,000 students) and King’s Mill Hospital
to the north-east. Nearby commercial occupiers include B&Q and McDonald’s. Both
LAKESIDE POINT
Sutton-in-Ashfield and Mansfield have respective shopping centres.
King’s Mill Hospital is located 0.4 miles to the north-east of the scheme, the hospital
B6023
is a state-of-the-art medical facility providing over 600 beds and healthcare services
to approximately 420,000 people across Mansfield, Ashfield, Newark, Sherwood and
parts of Derbyshire and Lincolnshire. The B&Q unit is the only store in Mansfield and
serves the surrounding catchment demographic.
The local plan has identified a target net increase of at least 7,683 dwellings will
be delivered within the period 2016 to 2032, dispersed across the district. Since
the identification of this target, the local council have recognised there to be
approximately 8,467 houses deliverable by 2032, exceeding the initial target.
Description Site / Planning
The scheme was constructed in 2005 and comprises built over two storeys with brick elevation and extends The property has a site area of 1.56 acres (0.63
four retail and leisure units and a hotel. National to 17,221 sq ft internally, each bedroom benefits from hectares) providing a site cover of 39%.
operators include Tesco, Subway, Frankie & Benny’s a king sized bed, en suite bathroom facilities, flat
and Travelodge. The retail and leisure units are of screen television, cupboard and a desk with chair. The 2004/0895 - Granted. Use Class C1 Hotel.
single storey concrete frame construction with a property underwent a full internal redecoration in 2015
combination of cavity brick and render to the facades to bring the asset up to the latest brand specification. 2005/0008 - Granted. Use Class A1 Retail and
under tiled and pitched roofs. A3 Restaurant.
There is free customer car park providing
The Travelodge provides a purpose-built hotel approximately 86 car parking spaces reflecting a
comprising 50 en suite bedrooms. The property is ratio of 1:309.
ES CE NT
Tenure Running Yield
Freehold. The landlord will provide a rental top-up for the Travelodge rent to the actual RPI level as at
September 2018. Based on the quoting price and using actual and forecasted RPI data from
the Office of National Statistics (ONS), the anticipated running yield at the next Travelodge
105
review (2020) is 6.57%.
22
Hotel
El
Sub
Sta
Posts
Total Scheme
LA KE S IDE
13
Lakeside Point
Date Travelodge Rent p.a. Running Yield
Rent p.a.
VIE W
1 07
9
297
299
Minimum Travelodge
Rent (Actual RPI data 01/09/2018 £ 199,299 £3,986 £344,441 6.34%
Paper Moon for Travelodge only)
Day Nursery
Shelter 140.8m
Travelodge rent
assuming ONS RPI 01/09/2020 £ 211,908 £4,238 £357,020 6.57%
forecast at next review
31
31 6c
31 6d
31 8
328
0m 10m 20m 30m
338 348
350
*RPI Data from Office of National Statistics
358
Tenancy
Unit Area Rent Rent ERV ERV
Tenant Lease Start Lease Expiry Next Review Break Comments / Asset Management
Name (sq ft) (pa) (psf) (psf) (pa)
City Centre Restaurant Tenant is to provide 6 months’ notice to
Unit 1 (UK) Ltd t/a Frankie & 3,532 24/06/2005 23/06/2030 29/09/2020 24/06/2020 £60,112 £17.02 £20.00 £70,640 exercise break. 5 yearly upwards only rent
reviews to OMV.
Benny’s
Jalland & Co Ltd t/a Guarantor of SJC 15 Limited. Sublet to CSM
Unit 2 983 03/11/2005 02/11/2020 - - £20,000 £20.35 £22.50 £22,117 Sutton Limited (t/a Subway) franchise at
Subway £15,000 pa.
Strong trading Tesco Express serving local
Unit 3 Tesco Stores Ltd 3,896 21/10/2005 20/10/2020 - - £50,000 £12.83 £14.00 £54,544 neighbourhood.
Rent commencement date 27/03/2019.
Unit 4 Birds (Derby) Ltd 942 27/03/2018 26/03/2028 29/03/2023 27/03/2021 £15,000 £15.92 £15.92 £15,000 Rent to be topped up by the vendor at
completion.
The Travelodge rent will be topped up
to £199,299 per annum, based on actual
£200,000 ONS RPI data to September 2018. 5 yearly
£11.57 upward only rent reviews to higher of open
17,221 £4,000 (est. £211,908
Hotel Travelodge Hotels Ltd 29/09/2005 28/09/2030 29/09/2020 - £199,299 (£3,986 market rent or RPI. The landlord has the
(50 rooms) per key subject to RPI option to extend the lease by up to 8 years
per key) (expiry 2038) for the consideration of £1
increases) provided it is invoked between 28/03/2029
and 28/09/2029.
*WAULT of 13.80 years to expiry
Total 26,574 £344,441 £364,929 (11.96 years to break)
*Assuming the landlord has exercised the right to extend the Travelodge lease to 2038.
Covenant Analysis Accounts Summary
Travelodge Hotels Ltd Profit (Loss) Net Assets
Turnover
Year Tenant Before Taxes (Liabilities)
Travelodge Hotels Ltd is the UK’s largest independent hotel brand boasting over FY 2017
FY 2017 FY 2017
558 hotels and 42,000 bedrooms across the UK as well as five hotels in Spain
and 12 franchises in Ireland. The budget hotel chain has recently announced plans
FY2017 Tesco Stores Ltd £40,134,000,000 £266,000,000 £7,765,000,000
to open 20 properties during 2018. In 2012, Golden Tree Asset Management,
Avenue Capital Group and Goldman Sachs took ownership of the business. Since
then, a significant investment programme has taken place with close to £100 City Centre Restaurant (UK)
FY 2017 £524,136,000 -£36,029,000 £124,271,000
million deployed in order to modernise 35,000 rooms across all hotels. Ltd t/a Frankie & Benny’s
Furthermore, Travelodge continue to invest in the quality of their hotels, which FY 2017 Birds (Derby) Ltd £22,894,773 £3,366,345 £24,722,709
has seen the roll out of the new SuperRoom concept, which feature a more
stylish décor and extra amenities. The latest results indicate that total revenue
Jalland & Co Ltd t/a Subway N/A N/A £234,000
was up by 6.60% in 2017 to £637.1 million, compared to the previous year. While FY 2016
guarantor SJC 15 Ltd £28,139,586 £5,668,873 £20,650,234
occupancy rates were “maintained” at 76.1% this increase was driven by strong
revenue per available room (RevPAR) growth of 2.90% to £40.49. As a result,
earnings before interest, tax, depreciation and amortisation (EBITDA) in 2017
were £112.4million .
Travelodge Hotels Ltd currently has a ‘minimum risk of business failure’ advised
by Dun & Bradstreet (D&B) with a resultant rating of ‘5A1’. The most recent
financial figures are highlighted below.
31/12/2017 31/12/2016 31/12/2015
Turnover £624,000,000 £587,700,000 £522,100,000
Profit/(Loss) Before Taxes £45,200,000 £46,800,000 -£545,300,000
Total Assets £689,700,000 £593,800,00 £535,900,00
Net Assets (Liabilities) £316,100,00 £271,600,000 £224,600,000
Service Charge EPC Proposal
The estate is subject to a service We understand the units for the following We have been instructed to seek offers in excess of £5,100,000, subject to contract
charge that is fully recoverable EPC ratings: and exclusive of VAT reflecting a NIY of 6.34% assuming standard purchasers costs of
from the tenants under the 6.59%. Reflecting a low capital value of £192 psf.
charge provisions detailed in
Unit EPC Rating Band
each respective lease.
1 90 D
2 66 C
Contact
VAT 3 52 C For further information or to arrange an inspection please contact:
4 89 D
Whilst VAT will be payable on Andrew McGregor Daniel Serfontein
Travelodge 72 C
the property we anticipated that E: andrew.mcgregor@knightfrank.com E: daniel.serfontein@knightfrank.com
the sale will be treated as a TOGC T: +44 20 7861 1531 T: +44 20 3640 7037
(Transfer of Going Concern). M: +44 7970 971 538 M: +44 7891 996 745
MISREPRESENTATION ACT: Knight Frank LLP give notice to anyone who may read these particulars as follows: 1. Particulars: These particulars are not an offer or contract, nor part of one. You should not rely on statements by Knight Frank LLP in the particulars or
by word of mouth or in writing (“information”) as being factually accurate about the property, its condition or its value. Neither Knight Frank LLP nor any joint agent has any authority to make any representations about the property, and accordingly any information
given is entirely without responsibility on the part of the agents, seller(s) or lessor(s). 2. Photos etc: The photographs show only certain parts of the property as they appeared at the time they were taken. Areas, measurements and distances given are approximate
only. 3. Regulations etc: Any reference to alterations to, or use of, any part of the property does not mean that any necessary planning, building regulations or other consent has been obtained. A buyer or lessee must find out by inspection or in other ways that
these matters have been properly dealt with and that all information is correct. 4. VAT: The VAT position relating to the property may change without notice. Knight Frank LLP is a limited liability partnership registered in England with registered number OC305934.
Our registered office is 55 Baker Street, London W1U 8AN, where you may look at a list of members’ names. September 2018.
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