TRAVELODGE ABERDEEN BUCKSBURN & PERTH A9 - A unique investment opportunity to acquire two securely let hotels - LoopNet
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TRAVELODGE ABERDEEN BUCKSBURN & PERTH A9 A unique investment opportunity to acquire two securely let hotels
INVESTMENT SUMMARY
The Vendor is seeking offers of in excess of
A unique opportunity to acquire two securely let
£8,520,000 (Eight Million, Five Hundred and
hotels; Aberdeen Bucksburn, totalling 48
Twenty Thousand Pounds), subject to contract ELGIN
bedrooms & Perth A9, totalling 53 bedrooms
and exclusive of VAT
INVERNESS
Let to one of the leading budget hotel
Pricing at this level reflects a net initial yield of ABERDEEN
operators, Travelodge Hotels Limited
6.00% assuming purchasers costs of 6.19%
on FRI Leases
The passing rents are subject to five yearly, RPI Alternatively, the vendor will entertain
linked, uncapped reviews and benefit from individual bids for each asset, and would seek
good levels of reversion offers excess of: DUNDEE
PERTH
The two hotels are well positioned, providing
Aberdeen: £5,720,000 STIRLING
excellent access to two of Scotland’s key cities (Five Million and Seven Hundred and Twenty EDINBURGH
Thousand Pounds) which reflects a net PAISLEY
GLASGOW
initial yield of 6.00% assuming
purchasers costs of 6.13%
Aberdeen Bucksburn has a current total passing
rent of £363,918 and Perth A9 has a current
passing rent of £177,914 per annum
Perth: £2,800,000
(Two Million, Eight Hundred Thousand Pounds)
Aberdeen Bucksburn is held Heritable Interest which reflects a net initial yield of 6.00% DUMFRIES
whilst Perth A9 is held Long-Leasehold with an assuming purchasers costs of 5.95%
unexpired term of 167 years
2 | TRAVELODGE ABERDEEN BUCKSBURN & PERTH A9
01 TRAVELODGE ABERDEEN BUCKSBURN A96, INVERURIE ROAD, BUCKSBURN, ABERDEEN, AB21 9BB
LOCATION TENANCY
Aberdeen is Scotland’s third largest city and is the main administrative The property is subject to a lease to Travelodge Hotels Limited with an
and financial centre for Aberdeen City and Aberdeenshire. The city is unexpired term of just under 20 years, expiring on 26 October 2038* at a
widely regarded as the energy capital of Europe and is home to the UK’s current rent of £323,601 per annum. The rent is subject to five yearly, RPI
oil and gas industry. The population which currently sits at 230,000 with a linked, uncapped reviews with the next review on 1 October 2021.
wider catchment of 500,000 is forecast to see significant growth of over Additionally, the Heritable Interest also generates a ground rent of £40,317
20% by 2035. which will be made available to the purchaser. The is subject to five yearly
review to 4% of average Gross Turnover last four years. The next review is in
The property lies approximately 4 miles north west of the city centre. The
September 2021.
property benefits from lying in close proximity to Aberdeen Airport and the
new Aberdeen Exhibition Centre. Occupiers nearby include Lidl, McDonald’s Based on CBRE predictions for RPI growth, we estimate the rental profile to
and Bucksburn Academy. The surrounding area includes some light run as below during the unexpired term:
industrial and residential.
Current
Passing 2021 2026 2031 2036
ACCOMMODATION Rent
The property provides 48 double bedrooms £363,918 £417,894 £486,472 £558,943 £641,547
TENURE
Heritable Interest (Scottish Equivalent of English Freehold). TITLE PLAN EPC
A copy of the EPC will be provided
to interested parties.
Aberdeen Airport
PROPOSAL
On this individual asset, we are
seeking offers in excess of
£5,720,000 which reflects a net
initial yield of 6.00%, after allowing
for standard purchaser’s costs.
*Assumes Landlord option to extend
to expiry
4 | TRAVELODGE ABERDEEN BUCKSBURN & PERTH A9
02 TRAVELODGE PERTH A9 CRIEFF ROAD, PERTH, PH1 3JJ
LOCATION TENANCY
Perth is an attractive and thriving city benefitting from an affluent catchment The property is subject to a lease to Travelodge Hotels Limited with an
area and is in the heart of Scotland approximately 43 miles north west of unexpired term of just under 20 years, expiring on 16 July 2038* at a
Edinburgh, 59 miles north east of Glasgow and 22 miles west of Dundee. current rent of £177,914 per annum. The rent is subject to five yearly, RPI
linked, uncapped reviews with the next review on 10 August 2020.
Perth is the administrative centre of the Perth & Kinross council area and has
historically been known as the ‘Gateway to the Highlands’. Perth is located Based on CBRE predictions for RPI growth, we estimate the rental profile to
at the base of the River Tay in the heart of Scotland with the A9 and run as below during the unexpired term:
A90/M90 linking the city to Edinburgh, Glasgow, Dundee and beyond.
Current
ACCOMMODATION Passing 2020 2025 2030 2035
Rent
The property provides 53 double bedrooms.
£177,914 £205,851 £242,719 £282,484 £327,477
TENURE
The property is held by way of a ground lease from Mitchells and Butler
Retail Limited, which expires on 9 August 2185 with a peppercorn passing
rent. TITLE PLAN EPC
A copy of the EPC will be provided
to interested parties.
PROPOSAL
On this individual asset, we
are seeking offers in excess of
£2,800,000 which reflects a net
initial yield of 6.00%, after allowing
for standard purchaser’s costs.
*Assumes Landlord option to extend
to expiry
Perth City Centre
6 | TRAVELODGE ABERDEEN BUCKSBURN & PERTH A9
03 TRAVELODGE COVENANT SUMMARY
COVENANT SUMMARY
TRAVELODGE HOTEL LIMITED
Travelodge Hotels Limited (Company No: 00769170 and D&B Rating: 5A1)
offers a very strong covenant and is the UK’s largest independent hotel
brand. The company opened the UK’s first branded budget hotel in 1985 as
part of the Trusthouse Forte Group and has grown its portfolio to a total of
over 558 hotel assets across the UK, Spain and Ireland. Travelodge, with
their nearest competitor Premier Inn, dominate the branded hotel sector in
the UK, operating over 70% of all branded budget bedrooms.
In 2012, Travelodge was acquired and the new owners, Goldman Sachs,
Avenue Capital and GoldenTree embarked on a £100m modernisation
programme. With a new emphasis on prime locations and improved
operating performance, Travelodge experienced substantial growth
beginning in 2013 and continuing to this day. In FY 2017, Travelodge
achieved a 3.1% increase in RevPAR to £40.5 and a revenue increase of
6.6% to £637.1m, this was largely underpinned by robust growth in ADR
performance. Travelodge’s EBITDA metric grew by 2.1% to £112.4m, an
increase of £2.3m.
Travelodge’s reported financial performance through the half year of 2018
has been strong as RevPAR grew by 3.1% and revenue increased by 8.0% to
£317.2m vs H1 2017. This was largely underpinned by Occupancy
increasing by 2.1 pts to 75.6% as ADR remained relatively stable.
Travelodge’s EBITDA for H1 grew by ca. 3% to £43.4m, an increase by
£1.3m. In the last two years, Travelodge has opened a further 34 hotels
(19 hotels in 2016 and 15 hotels in 2017) and the group has already
opened 9 hotels in 2018 with an additional 12 properties currently under
construction and expected to open later this year.
The most recent financial figures are detailed below:
31st December 2017 31st December 2016
Turnover (£) £624,000,000 £587,700,000
EBITDA (£) £112,400,000 £110,100,000
Pre-Tax Profit £45,200,000 £46,800,000
Net Current Assets £411,800,000 £369,900,000
Tangible Net Worth £316,100,000 £271,600,000
8 | TRAVELODGE ABERDEEN BUCKSBURN & PERTH A9
02 SUMMARY
SUMMARY
Head Lease Head Occupational Current Next Rent
Hotel Tenure Expiry Date Rent Review Expiry Date Passing Rent Review
ABERDEEN Heritable Interest* 09/09/2061 £40,317 5 yearly to 4% of average Gross Turnover last four years 26/10/2038 £323,600 01/10/2021
PERTH Long-Leasehold 09/08/2185 £10 n/a 16/07/2038 £177,914 10/08/2020
*The Vendor controls both the Long-leasehold and Heritable Interest and will offer both interests as part of the sale.
RECENT TRAVELODGE TRANSACTIONS YIELD PROFILE
Unexpired Net Initial Aberdeen Perth Combined
Address Date Term Price Yield 2019 6.00% 6.00% 6.00%
Edinburgh Park, Edinburgh Oct 2018 25.0 £6.6m 5.40% 2020 6.00% 6.94% 6.31%
Chapel Street, Peterhead Aug 2018 23.5 £3.57m 6.10% 2021 6.89% 6.94% 6.91%
Justice Mill Lane, Aberdeen Apr 2018 20.9 £9.5m 5.85% 6.89% 6.94% 6.91%
2022
Kings Inch Road, Glasgow Apr 2018 20.9 £4.97m 5.33% 2023 6.89% 6.94% 6.91%
2024 6.89% 6.94% 6.91%
2025 6.89% 8.19% 7.32%
2026 8.02% 8.19% 8.07%
2027 8.02% 8.19% 8.07%
2028 8.02% 8.19% 8.07%
2029 8.02% 8.19% 8.07%
2030 8.02% 9.53% 8.52%
2031 9.22% 9.53% 9.32%
2032 9.22% 9.53% 9.32%
2033 9.22% 9.53% 9.32%
2034 9.22% 9.53% 9.32%
2035 9.22% 11.04% 9.82%
2036 10.58% 11.04% 10.73%
10 | TRAVELODGE ABERDEEN BUCKSBURN & PERTH A9CONTACT PROPOSAL
The Vendor is seeking offers of in excess of £8,520,000 (Eight Million, Five Hundred and Twenty
ALISTAIR WRIGHT Thousand Pounds), subject to contract and exclusive of VAT.
T: 0131 243 4178 Pricing at this level reflects a net initial yield of 6.00% assuming purchasers costs of 6.07%
E: alistair.wright@cbre.com
Alternatively, the vendor will entertain individual bids for each asset individually, and would seek
offers excess of:
FRANCO SIDOLI
T: 020 7182 2121
E: franco.sidoli@cbre.com
Aberdeen: £5,720,000 Perth: £2,800,000
MARC NELSON
(Five Million and Seven Hundred and Twenty (Two Million, Eight Hundred Thousand Pounds)
T: 020 7182 3610 Thousand Pounds) which reflects a net which reflects a net initial yield of 6.00%
E: marc.nelson@cbrehotels.com initial yield of 6.00% assuming assuming purchasers costs of 5.95%
purchasers costs of 6.13%
Henrietta House
Henrietta Place
London W1G 0NB
CBRE Limited on its behalf and for the Vendors or Lessors of this property whose Agents they are, give notice that: 1. These particulars are set out as a general outline only for guidance to intending Purchasers or Lessees, and do not
constitute any part of an offer or contract. 2. Whilst CBRE Limited uses reasonable endeavours to ensure that the information in these particulars is materially correct, any intending Purchasers, Lessees or Third Parties should not rely
on them as statements or representations of fact, but must satisfy themselves by inspection, searches, enquiries, surveys or otherwise as to their accuracy. CBRE Limited as such cannot be held responsible for any loss or damage
including without limitation, indirect or consequential loss or damage, or any loss of profits resulting from direct or indirect actions based upon the content of these particulars. 3. No person in the employment of CBRE Limited has any
authority to make any representation or warranty whatsoever in relation to this property. 4. Unless otherwise stated, all purchase prices and rents are correct at the date of publication and, unless otherwise stated, are quoted exclusive
of VAT. Lease details and service ground rent (where applicable) are given as a guide only and should be checked and confirmed by your solicitor prior to exchange of contracts.
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