INVESTMENT OPPORTUNITY PHASE 2A BELGRADE A MIXED USE SCHEME PLAZATOTALLING 129,500 SQ FT
COVENTRY CV1 4AH THE BUILDING COMPRISES THE FOLLOWING
› Forms part of a larger regeneration area › 64 one & two bed apartments, let to a subsidiary of Coventry University › 120 room Hotel, let to Premier Inn › 4 retail units totalling 15,183 sq ft, let to Pizza Express, Café Rouge, Bella Italia and Martin McColl (under offer) › A gym totalling 26,385 sq ft, let to JD Sports Gyms › Excellent opportunity to acquire a modern, prominent mixed use investment situated within Coventry City Centre A MIXED USE SCHEME TOTALLING 129,500 SQ FT Coventry is the 11th largest city in the UK 96% of the income is secured against and home to over 54,000 students as well as tenants with a Dun & Bradstreet Failure INVESTMENT SUMMARY national level occupiers such as Jaguar Land Score of above 72 (with 1 being the worst Rover, EON, IBM, Barclays Bank, Admenta UK and 100 being the best). PLC (AAH Pharmaceuticals), Sainsbury’s and The London Taxi Company. The property is held on a long lease for a term of 150 years from 20 May 2005 THE SECOND The property was built in 2008 and is at a current rent of £67,000 per annum, 100% let proving a total net passing rent subject to annual upward only increases of £1,386,000 per annum. linked to the Retail Price Index.
7 tenancies providing a weighted average The asset is held in an SPV which LARGEST unexpired lease term in the region of 12.7 is available for transfer. years to break and 14.44 years to expiry.
74% of the rent is reviewed by way of fixed WE ARE INSTRUCTED TO SEEK OFFERS uplifts in accordance with CPI. IN EXCESS OF £23,000,000 (TWENTY
CITY IN THE Over 70% of the income is from the THREE MILLION POUNDS). THIS PRICE residential block and hotel. REFLECTS A NET INITIAL YIELD OF 5.92% MIDLANDS (ASSUMING 1.8% PURCHASER’S COSTS). In 2018 Coventry & Warwickshire LEP was the fastest growing economic area outside of London and largest exporting area outside the capital. COVENTRY In 2018 Coventry & Warwickshire LEP was the fastest growing economic area outside of London and largest exporting area outside the capital. In total, the area benefited from 53 foreign direct investments which was 6 times higher than the other regions. The Coventry and Warwickshire LEP was earmarked as the fastest growing in terms of gross value added per head and economic growth. 375,000 6 million 54,000 Population People live within 1 hour’s drive Students
71,000 75% 36.2 years People commute to Coventry of England is within a 2 hour drive Average age every day (5th youngest city in UK) 2021 UK City of Culture FINDING YOUR IN THE CORE OF THE CITY KEY WAY TO THE CITY 1. Belgrade Plaza 2. Coventry University 3. Belgrade Theatre Coventry is a cathedral city located at the heart of the UK Leeds 4. The Herbert with a population of 375,000 making it the 2nd largest city Manchester 5. Millennium View in the West Midlands and 11th largest in the UK. 6. Friargate Birmingham Coventry 7. AXA The city lies approximately 19 miles (30.6 km) to the south 8. IKEA east of Birmingham and 96 miles (154.5 km) to the north Cardiff London 9. Retail Centres west of London. Bristol
RAIL AIR
Coventry railway station is located in the city centre and Birmingham Airport is 11 miles to the north-west and has offers excellent national rail connections via the West a direct train connection with Coventry railway station Coast Mainline. The station is due to undergo an £82m from Birmingham International. expansion which includes a new station building to provide Birmingham Airport is the 4th largest airport in the UK a second entrance facing onto the Warwick Road along 7 outside London, 7th largest overall and served over 12.5 with five new retail units. Belgrade Plaza is approximately million passengers in 2018. 14 minutes’ walk. 5 1 There are currently plans for a £500m expansion which is 3 2 likely to increase passenger numbers to over 18 million per Destination Travel Times (mins) year by 2033. London Euston 62
Birmingham New Street 23 2 Airport Distance (miles) 9 Birmingham International 11 2 Birmingham 11 4 Oxford 48 8 2 Reading 75 East Midlands 43 2 2
ROAD Birmingham Travel Time 2 Coventry is located at the heart of the national motorway International Airport network. The city is in close proximity to J2 and J3 of the Edinburgh 1hr 10m M6, J1 of the M69, J6 of the M42 and J15 of the M40 motorways allowing fast access to the national motorway network serving the Midlands region. Paris 1hr 15m
2 Geneva 1hr 20m Motorway Links Distance (miles) 6 A46 3.2 Dubai 6hr 55m 6 6 M69 5.2 New York 7hr 45m M6 5.1
M42 9.2 Beijing 15hr
M40 13 STATION BELGRADE PLAZA LAMB STREET - A NEW DEVELOPMENT OF 1,200 STUDENT UNITS SUBJECT PROPERTY
belgrade THEATRE belgrade SQUARE belgrade
MAIN ENTRANCE PHASE 2B TOWN WALL TAVERN PHASE 3
SUBJECT PHASE 2B STUDENT ACCOMMODATION CAR PARK PROPERTY & EISURE
UPPER WELL STREET
HILL STREET
CAR PARK ACCESS & WC’s £100m transformation of the former National Grid site belgrade plaza car park to include 700 new homes PHASE 3 HOTE SITE
Belgrade Plaza is an estimated £163m PHASE 1 mixed use scheme situated off the Ring A 1,091 space multi-storey car park Road (A40543) approximately 2 minutes’ walk from Coventry City Centre. The first SUBJECT PROPERTY former COVENTRY phase of development started in 2008 and Phase 2A initially comprised of a car park, then a TELEGRAPH BUILDING mixed use scheme (the subject property). PHASE 2B More recently, the scheme has transformed Completed in 2017 and provides a 20 storey building comprising through 2 further phases to include the final 600 student beds and 40 apartments phase which is now under construction. PHASE 3 Under construction providing a 14 storey building with 385 student beds, a 15 storey building with 100 private apartments due for SUBJECT PROPERTY completion Q4 2019 TOURISM
Coventry generates an estimated £385m In 2021 Coventry is expecting an extra 2.5m spend per annum through tourism, which visitors which equates to 6,000 additional visitors supports approximately 6,900 jobs every day and by 2023 the aim is to attract over 10 THE WIDER PLAZA million visitors per year. (5.9% local employment). Coventry’s main leisure attractions include; Belgrade Currently, the wider Plaza is home is Belgrade Theatre which is one of In 2021 the city will become the third City of Culture. The previous winner was Hull in 2017 Plaza, Sky Dome Arena, Ricoh Arena, Leisure World, to over 650 students beds which Coventry’s main leisure attractions which attracted over 5 million people to the city Coventry Cathedral and Herbert Art Gallery & is due to rise to over 1,000 after which will benefit from a £4.8m encouraging £220m worth of investment and Museum. Most of these are situated on the west and ‘Phase 3’ is completed and occupied. refurbishment due to be completed contributed to the creation of 800 new jobs. northern side of the city centre. This has created a hive of activity in 2020. for younger people throughout the working week as well as weekends. The former Coventry Telegraph In addition to this, the award winning building (see below) which is multi-storey car park is currently the opposite Belgrade Square is due to largest within Coventry providing be transformed into a 88 bedroom COVENTRY STUDENT MARKET a highly accessible link to the city luxury boutique hotel creating 130 Coventry University is currently home to over 54,000 students from over which contributes to further footfall jobs due to open in 2021. 140 countries. The two main Universities are Coventry and Warwick. for the Plaza. Immediately outside Coventry University Warwick University
Renowned disciplines Transport and Engineering Arts, Medicine, Science and Social Sciences
Guardian University Guide Ranked 13th overall in the UK Ranked 8th overall in the UK
Student Population c. 30,000 c. 24,000
International Students 34% 35%
In 2018, 4 UK cities featured in the top 10 European Belgrade Plaza was, and still is an integral part of the student cities for investment and Coventry featured regeneration of the city centre. The current Coventry 8th with £160m invested. development pipeline is below:
DEVELOPMENT PIPELINE
COVENTRY UPPER FRIARGATE BISHOPGATE ABBOTS LANE NEW UNION TRAIN STATION PRECINCT £700m business EAST £100m STREET £82m regeneration £300m retail and district master £60m project transformation of £36.7m of the station to leisure development plan which once comprising the former National development include a 644 space expected to completed will both student Grid site to include of a water park and car park complete in 2022 comprise and residential 700 new homes leisure centre known of 14 buildings accommodation as ‘The Wave’
Proposed development of former Coventry Telegraph building Residential reception Café Rouge
Premier Inn
Bella Italia JD GYMS Premier Inn DESCRIPTION TENANCY SCHEDULE
The property is a high quality mixed used and full height glazing to commercial units at development which was completed in 2008. The ground and first floor level. property comprises 64 one and two bedroom The “U-shaped” building provides four retail apartments let to Coventry University, a 120 room LEASE LEASE RENT AREA RENT RENT PROPORTION units, reception lobbies for the hotel, student TENANT COMMENTS hotel, 4 retail units and a gym. START EXPIRY REVIEW (SQ FT) (PER SQ FT) (PER ANNUM) OF INCOME accommodation and the first floor gym at ground The seven-storey building is of a concrete frame floor level. All elements have their own separate 5 yearly rent reviews construction with structural steelwork at roof level entrance and service cores. Coventry 29.08.23 compounded annually and solid concrete floors. The elevations comprise a University 29.08.18 28.08.30 29.08.28 64 units £617,000 42.46% to CPI at 1.5% and 3% p.a College Ltd mixture of brick, sheet cladding to the upper levels collar and cap.
New reversionary lease at 10.11.23 re-based rent. Tenant break TENURE Premier Inn 10.11.28 £3,350 per option 7.8.38. 5 yearly Hotels 29.09.08 28.09.42 10.11.33 120 rooms £402,000 26.76% room rent reviews compounded The property is held on a long lease for a term of 150 years from 20 May 2005 at a current rent of £67,000 Limited 10.11.38 per annum, subject to uncapped annual upward only increases linked to the Retail Price Index. annually to CPI at 0% and 4% p.a collar and cap. The lease is guaranteed by JD Sports Fashion Plc JD Sports 26.10.20 on a rolling two year basis. 26.10.15 24.10.30 26,559 £6.59 £175,000 12.04% Gyms Limited 26.10.25 Service charge capped at £20,000 p.a. Break option 26.10.25.
Café Rouge Tenant wishes to extend Restaurants 25.12.12 24.12.27 25.12.22 4,363 £16.04 £70,000 4.82% lease if landlord improves Limited external dining.
Pizza Express 25.12.18 Tenant has recently (Restaurants) 25.12.08 24.12.33 25.12.23 3,416 £20.49 £70,000 4.82% removed the 2023 break. Limited 25.12.28
Bella Italia Tenant wishes to extend Restaurants 24.06.09 23.06.24 3,157 £19.48 £61,500 4.23% lease if landlord improves Limited external dining.
A new 15 year lease with 5 yearly rent reviews Under offer linked to CPI compounded to Martin TBC TBC TBC 5,008 £11.48 £57,500 3.46% annually with a collar and McColl Ltd cap of 1% and 3%. Service charge cap of £6,000 p.a with annual CPI increase.
TOTAL £1,453,000
NET OF Ground rent currently £1,386,000 GROUND £67,000 per annum RENT INCOME PROFILE DUN & BRADSTREET FAILURE SCORE
Score out of 100 100 being best and 1 being worst
Premier Inn Hotels Limited 27.67%
84 and above 48.76% JD Sports Gyms Limited 12.04%
Other Café Rouge Restaurants Limited 54 29.87% 4.82% 3.96% Pizza Express (Restaurants) Limited 4.82%
Bella Italia Restaurants Limited 4.23%
Martin McColl Ltd 3.96%
Coventry University College Ltd 72 - 74 42.46% 47.28%
PERCENTAGE INCOME FIXED UPLIFTS VS OPEN MARKET REVIEWS
Pizza Express, Belgrade Plaza
Index linked uplifts Open market reviews 74.09% 25.91%
JD Gym, Belgrade Plaza Café Rouge, Belgrade Plaza The Futurelets Limited Premier Inn Hotels Limited The tenant is a wholly owned subsidiary of Coventry University setup to control the University’s Premier Inn is a subsidiary of Whitbread Group plc and the largest hotel brand in the UK with over 700 property portfolio. Coventry University has over 30,000 students situated primarily in the City centre. hotels and 59,000 rooms operating in a variety of different locations such as airports, city centre and It was voted 6th in the UK for ‘Student Experience’ and voted the top modern University in the United suburbs. Further to this, the group also has hotels situated overseas particularly in the Middle East and Kingdom by The Times for the last 3 years consecutively. From 2015 through to 2017 the University India. In November 2018, the hotel was named the ‘Which?’ UK’s top rated hotel chain for the fourth increased turnover by 56%. year in a row.
Dun & Bradstreet rate them N2 with a failure score of 72* Dun and Bradstreet rate them 5A1 with a failure score of 100 *
FISCAL FISCAL FISCAL FISCAL FISCAL FISCAL NON-CONSOLIDATED NON-CONSOLIDATED NON-CONSOLIDATED NON-CONSOLIDATED NON-CONSOLIDATED NON-CONSOLIDATED GBP GBP GBP GBP GBP GBP 31 Jul 2018 31 Jul 2017 31 Jul 2016 02 Mar 2017 02 Mar 2016 02 Mar 2015 (000s) (000s) (000s) (000s) (000s) (000s)
Sales turnover 3,709 2,725 1,618 Sales turnover 874,907 812,000 743,195
Profit/(Loss) before taxes 148 (101) (199) Profit/(Loss) before taxes 245,675 268,397 255,471
Tangible net worth (357) (440) (557) Tangible net worth 940,001 1,143,166 923,100
Net current assets (liability) 423 256 103 Net current assets (liability) (543,468) (286,238) (386,384)
The parent company, Coventry University shows the following results:
Coventry University JD Sports Gyms Limited Dun & Bradstreet rate them 5A1 with a failure score of 100* First launched in 2014 this is a rapidly growing company offering UK wide budget gyms. Within the last 2 years, JD Sports Gyms have grown from 5 sites to 23. Their revenue grew from £1.658m in the year up to 31st January 2015 to £9.73m in the year up to 3rd February 2018. FISCAL FISCAL FISCAL They are a wholly owned subsidiary of JD Sports Fashion PLC. NON-CONSOLIDATED NON-CONSOLIDATED NON-CONSOLIDATED GBP GBP GBP 31 Jul 2018 31 Jul 2017 31 Jul 2016 Dun and Bradstreet rate them N2 with a failure score of 84 * (000s) (000s) (000s)
Sales turnover 368,726 330,402 305,117 FISCAL FISCAL FISCAL Profit/(Loss) before taxes 18,246 15,499 28,059 NON-CONSOLIDATED NON-CONSOLIDATED NON-CONSOLIDATED GBP GBP GBP 03 Feb 2019 28 Jan 2017 30 Jan 2016 Tangible net worth 322,282 305,995 251,713 (000s) (000s) (000s)
Net current assets (liability) 159,159 201,987 249,431 Sales turnover 9,730 5,249 1,658
Profit/(Loss) before taxes 1,084 399 (230)
Tangible net worth (81) 1 (339)
Net current assets (liability) (6,405) (1,301) (659)
*With 1 being the worst and 100 being the best. CASUAL DINING GROUP LIMITED Bella Italia Restaurants Limited were absorbed into their parent company, Casual Dining Group Limited, Pizza Express Restaurants Limited a short while ago. Casual Dining Group own multiple brands including Las Iguanas, Cafe Rouge, La Tasca and Belgo. They employ over 10,000 people and serve over 21 million meals at approximately Pizza Express has over 400 restaurants across the UK and further restaurants overseas. 300 locations. Bella Italia has approximately 90 restaurants in the UK. Their immediate parent company is Pizza Express Limited. Dun and Bradstreet rate them N1 and failure score of 97 * Dun and Bradstreet give them a rating of 5A1 with a failure score of 100 *
FISCAL FISCAL FISCAL FISCAL FISCAL FISCAL NON-CONSOLIDATED NON-CONSOLIDATED NON-CONSOLIDATED NON-CONSOLIDATED NON-CONSOLIDATED NON-CONSOLIDATED GBP GBP GBP GBP GBP GBP 31 Dec 2017 28 Jun 2015 29 Jun 2014 02 Mar 2017 02 Mar 2016 02 Mar 2015 (000s) (000s) (000s) (000s) (000s) (000s)
Sales turnover 396,559 601,005 382,942 Sales turnover 874,907 812,000 743,195
Profit/(Loss) before taxes 68,473 120,891 76,365 Profit/(Loss) before taxes 245,675 268,397 255,471
Tangible net worth 710,730 640,497 524,115 Tangible net worth 940,001 1,143,166 923,100
Net current assets (liability) 528,865 457,817 350,953 Net current assets (liability) (543,468) (286,238) (386,384)
CAFÉ ROUGE RESTAURANTS LIMITED MARTIN McCOLL LTD Café Rouge was launched in 1989 and currently has approximately 120 restaurants across the UK. The McColl’s Retail Group is British shop and newsagent operator. The group have approximately 1,650 company is owned by Casual Dining Group, one of the largest independent restaurant companies in the shops in the U.K. Martin McColl Ltd is the wholly owned subsidiary that acquired 298 shops from The UK. Casual Dining Group announced a new investment into their business of £30m recently. Co-operative Group in 2016.
Dun and Bradstreet rate them 4A2 and failure score of 74 * Dun and Bradstreet rate them 5A2 and failure score of 56 *
FISCAL FISCAL FISCAL FISCAL FISCAL FISCAL NON-CONSOLIDATED NON-CONSOLIDATED NON-CONSOLIDATED NON-CONSOLIDATED NON-CONSOLIDATED NON-CONSOLIDATED GBP GBP GBP GBP GBP GBP 28 May 2018 29 May 2016 31 May 2015 27 May 2017 29 May 2016 31 May 2015 (000s) (000s) (000s) (000s) (000s) (000s)
Sales turnover 75,723 79,451 80,182 Sales turnover 713,391 518,736 489,336
Profit/(Loss) before taxes (15,558) (15,090) (9,359) Profit/(Loss) before taxes 27,168 25,631 22,229
Tangible net worth 30,443 42,254 60,353 Tangible net worth 42,850 111,606 91,307
Net current assets (liability) 5,348 194 9,680 Net current assets (liability) (58,774) (57,314) (66,202)
*With 1 being the worst and 100 being the best.
INVESTMENT RATIONALE
› Strong lease term. › Phase 2 and 3 developments will bring over 1,000 students to the location, along with 100 › Diverse income profile from 4 separate private residents which will increase footfall sectors; student accommodation, hotel, thereby improving demand for the leisure and food & beverage and leisure. retail elements. › Strong covenant profile of tenants with 96% › Opportunity to re-gear Café Rouge and Bella of the income secured against covenants with Italia in the short term. a failure score higher than 72 out of 100. › Significant increase in footfall due to › Guaranteed rental performance from 74% large scale new housing and student of the scheme through CPI uplifts. accommodation scheme committed in the › Potential to sell off income strips. immediate vicinity. INVESTMENT MARKET
AREA DATE PROPERTY ADDRESS TENANT WAULT SALE PRICE YIELD PURCHASER (SQ FT)
March Old County Hall, Coventry 20 years to exp 8,469 £3,700,000 4.86% Private 2019 Coventry University 10 years to break
March St Mary’s Gate, Premier Inn CBRE Global 126 beds 25.5 years £10,330,000 4.35% 2019 Sheffield Hotels Ltd investors
Stanhope Road, August Rockspring Portsmouth 152 beds Travelodge 25 years £19,050,000 5.17% 2018 Hanover Central
Quayside, December The Melia and Newcastle 120 beds 25 years £38,000,000 4.5% Orchard Street 2018 Travelodge upon Tyne
December Optima, Swiftmatch 61 beds 11.5 years £7,000,000 5.43% SPS Investments 2018 Loughborough Ltd
21 NHS, July 2018 purpose NHS 20 years £14,200,000 5% AEW Newcastle built blocks
100 beds, Derrys Cross, Multi-tenants May 2018 1 gym, 17.45 years £17,250,000 5.2% TBC Plymouth Mixed use 4 F&B SERVICE CHARGE Service charge from Apr 2019 to Mar 2020 is £48,444 for the subject property. The service charge is calculated on a floor area basis and a full detailed breakdown of the service charge apportionment is available in the data room.
The subject property includes the common parts of the wider estate. This provides the owner with the benefit of ensuring that the scheme’s superior appearance is retained. The charge is recoverable from all four stakeholders.
EPC’s Available upon request.
VAT The subject property has been elected for the purposes of VAT and it is anticipated that the sale will be treated as a TOGC (Transfer of a Going Concern).
DATAROOM Further information is available upon request and all relevant documentation pertaining to the building is stored in a dedicated data room. Please contact the sole selling agents for access.
PROPOSAL We are instructed by the vendor to seek offers in excess of £23,000,000 (Twenty Three Million Pounds) subject to contract and exclusive of VAT. This price reflects a 5.92% net initial yield (assuming 1.8% purchasers costs) and a low capital value of £177.61 per sq ft.
SPV The asset is held in an SPV which is available for transfer.
Premier Inn, Belgrade Plaza JD Gym, Belgrade Plaza CONTACT For further information please contact:
Andrew Meikle [email protected] 07703 119 913
Ben Voss-Wood [email protected] 07733 302 908
Jack Dukes [email protected] 07469 403 638
Misrepresentation Act 1967: BNP Paribas Real Estate Advisory & Property Management UK Limited for themselves and for the vendor(s) or lessor(s) of this property whose agents they are, give notice that: 1. These particulars do not constitute, nor constitute any part of, an offer or contract. 2. None of the statements contained in these particulars as to the property are to be relied on as statements or representations of fact. 3. Any intending purchaser or lessee must satisfy himself by inspection or otherwise as to the correctness of each of the statements contained in these particulars. 4. The vendor(s) or lessor(s) do not make or give and neither BNP Paribas Real Estate Advisory & Property Management UK Limited nor any person in their employment has any authority to make or give, any representation or warranty whatever in relation to this property. Finance Act 2013: Unless otherwise stated all prices and rents are quote exclusive of VAT. The Business Protection from Misleading Marketing Regulations 2008: These details are believed to be correct at the time of compilation but may be subject to subsequent amendment.