The Other Palace Theatre

12 Palace Street • Victoria • SW1E 5JA

“Virtual freehold theatre investment for sale on instructions of Aiden Murphy of Crowe Horwath (Receiver)” Investment Summary

++ Prime Victoria location

++ Close to London Victoria Station, Buckingham Palace and St James’s Park

++ 999 year interest from 8 November 2006 subject to an occupational lease to Entertainment Theatres Limited with a guarantor from the LW Theatres Group Limited (D&B Rating 5A1)

++ 75 year occupational lease from 17 September 2012

++ Current £107,564 per annum

++ Five yearly rent reviews to the higher of open market or CPI subject to a maximum of 16% at each rent review

++ Business unaffected by sale

++ Accommodation arranged over lower basement, basement, ground and first floors with a GIA – 1,371 sq m (14,761 sq ft)

++ Offers in excess of £2,500,000 (4.04% NIY) are invited for the benefit of our clients long leasehold interest reflecting a low capital value per square foot of £169 per square foot Location Buckingham Buckingham St James' GROSVENOR PLACE Palace Gardens Palace Located in the heart of Westminster in Park London’s West End, in one of the capitals most exclusive and affluent districts. The district benefits from an influx of both commuters BIRDCAGE WALK given the close proximity to Victoria Station as well as tourists interested in exploring the many attractions in the area including THE OTHER B323 WESTMINSTER Buckingham Palace, Westminster Abbey, Westminster Cathedral and Tate Britain. PALACE THEATRE BUCKINGHAM GATE The Other Palace Theatre occupies a prominent position at the intersection UPPER BELGRAVE STREET Cardinal between Warwick Row and Palace Street Place in a mixed use residential and commercial ROS LOWER G VENOR area. The property is adjacent to the Phoenix A3217 public house (Geronimo Inns/Young’s), the Nova Nadler Victoria Hotel and directly opposite A3214 1 Palace Street, a development of 72 luxury apartments due for completion in December BELGRAVE PLACE A302 VICTORIA STREET

2019 http://numberonepalacestreet.com/. A3217

Immediately to the rear of the property A3215 is Cardinal Place where occupiers include Marks and Spencer, Browns (Mitchells and Westminster Butlers), Zizzi, Wagamama and Nando’s. Cathedral

A3213 The area immediately surrounding the theatre Victoria has undergone significant redevelopment Station including the £700m upgrade of London VICTORIA Victoria Station by Transport for London and the £2bn, 5.5 acre, Nova Victoria A3213 development by Land Securities providing 480,000 sq ft of offices, 85,000 sq ft of retail/restaurants and 170 luxury apartments.

The Other Palace Theatre 12 Palace Street, Victoria, London SW1E 5JA DESCRIPTION Lower Basement Planning The lower basement comprises a cabaret/studio venue which has a capacity of 102 (82 seated and The property forms part of the 12 Palace Street Our initial enquires of the local authority have revealed 20 standing). This area has its own bar servery and a seven storey development with a 302 seat theatre that the property is not listed nor is it situated within a raised stage area. There is a balcony overlooking the auditorium, separate cabaret/studio venue, bar and conversation area. stage which has further seating for 17. The remainder restaurant arranged over lower basement, basement, of the lower basement comprises a number of ground and first floor levels. storage/plant rooms, artists dressing and prop rooms, a disabled toilet, shower room and an office. EPC

ACCOMMODATION Upper Floors B - 47 The upper floors, which are outside of our clients Ground floor ownership, have been developed to provide 35 luxury The ground floor comprises the main foyer with apartments. Tenure and Tenancy box office and an open plan bar area with customer seating on loose tables, chairs and fixed booth seating The property has the following approximate gross The property is held on a long leasehold (999 years) and toilets to the rear. There is a lift to the side of the internal floor areas: at a peppercorn rent from 8 November 2006. The user bar servery which services all floors. The auditorium provisions of the long leasehold interest are restricted theatre is situated to the rear of the ground floor Level Description Sq M Sq Ft to the use of the premises as a theatre along with a and provides raked seating for up to 302 persons Ground Bar/Ancillary 415.0 4,467 designated area which can be used as a restaurant/ with a number of technician’s studios to the rear of cafe and/or bar. the auditorium. Ground Auditorium 282.9 3,045

First Restaurant 136.3 1,468 The lower basement, basement, ground and first floors First Floor are held on a 75 year lease to Entertainment Theatres The restaurant, trading as The Other Naughty Piglet, is Basement Ancillary 193.1 2,078 Limited (company number 07635832) expiring 16 accessed via a feature staircase from the ground floor Lower Basement Ancillary/Studio 344.0 3,703 September 2087 at a current rent of £107,564 per and comprises an open plan theatre style trade kitchen annum with a guarantor from LW Theatres Group to the rear with customer seating on a mix of loose 1,371.3 14,761 Limited (company number 03987988). The lease is tables, chairs and fixed booth seating. subject to five yearly reviews from with the next rent review due in September 2022, which are to the higher Basement of open market or CPI, capped so that the rent can The basement comprises ancillary areas including staff only increase to a maximum of 16% at each rent review. changing rooms and a number of storage/plant rooms.

The Other Palace Theatre 12 Palace Street, Victoria, London SW1E 5JA The London Market

London continues to be recognised as one of the worlds safe havens for property investors. Its status as a leading global financial centre and as one of the most visited cities by tourists continues to drive investor and occupier demand.

The most recent research released by the Office for National Statistics indicated that the number of international visits to London increased by 20% between 2010 and 2015 to 18.6 million with separate research by Oxford Economics predicting that the capital will welcome 35.6 million visitors by 2020. Visitor spend in London has also increased significantly with £15 billion spent on hotels, restaurants and attractions, an increase of 35% when compared with 2010.

Investor demand for London assets remains incredibly strong particularly for buildings which are let to strong covenants on long leases. The strength of demand has led to investment yields sharpening in recent years as can be seen from the schedule of comparable leisure transactions below.

Comparable Transactions

Property Price Yield (NIY) Date

Shakespeare’s Head, Great Marlborough £17.55m 3.68% December 2018 Street, W1

Barrio, Poland Street, W1 £8.55m 3.26% October 2018

Prince of Wales, Drury Lane, WC2 £10.25m 2.52% March 2018

Kitty Fishers, Shepherd Market, W1 £4.5m 2.42% March 2018

Red Lion, Crown Passage, SW1 £2.8m 3.02% February 2018

Pizza Express, Dean Street, W1 £2.96m 2.99% January 2018

Library, St Martins Lane £9.35m 2.50% May 2017

The Other Palace Theatre 12 Palace Street, Victoria, London SW1E 5JA Covenant

LW Theatres Group Limited, who act as guarantor under the occupational lease, are a leading musical theatre company operating seven venues in London’s West End. The group, which has a 5A1 Dun & Bradstreet rating, is wholly owned by and operates the following venues in addition to the Other Palace Theatre:

Venue Address Current Productions

Adelphi Strand, London WC2R 0NX Waitress

Cambridge Earlham Street, London WC2H 9HU Matilda the Musical

Her Majesty’s Haymarket, London SW1Y 4QL The Phantom of the Opera

Joseph & The Amazing Technicolor Argyll Street, London W1F 7TF Dreamcoat*

New London 166 Drury Lane, London WC2B 5PW School of Rock the Musical

Theatre Royal Catherine Street, London WC2B 5JF Currently closed for refurbishment

Musical theatre is the largest market segment in the United Kingdom and LW Theatres Group is the largest operator of musical theatres in London accounting for one third of all visits to musicals in the capital. The group is committed to reinvesting in its portfolio having spent £18m over the past 5 years and for the 53 weeks to 2 July 2017 reported a group , which was at the time known as The Really Useful Theatres Group Limited before changing its name in July 2018, turnover of £41.42m with shareholder funds of £64.69m

*starting from 27 June 2019

The Other Palace Theatre 12 Palace Street, Victoria, London SW1E 5JA VAT

It is envisaged that the property will be sold as a TOGC so the transaction should therefore be exempt from VAT.

Terms

We are instructed to invite offers in excess of £2,500,000 (4.04% NIY) assuming purchasers costs of 6.38%. This reflects a low capital value per square foot of £169.

The business will continue to trade unaffected from the premises during the marketing of the property and post completion of the sale. viewings and Contacts

All viewings must be made by prior appointment and under no circumstances should any direct approach be made to any of the occupational tenants staff. For further information and all viewing requests please contact the sole selling agents Savills. Paul Breen 020 7877 4555 [email protected] Stuart Stares 020 7299 3088 [email protected] Colin Lambert 07968 550 415 [email protected]

Published for the purposes of identification only and although believed to be correct its accuracy is not guaranteed. Reproduced from the Ordnance Survey Map with the permission of the Controller of H.M. Stationery Office © Crown copyright licence number 100024244 Savills (L&P) Limited. Savills, their clients and any joint agents give notice that: 1. They are not authorised to make or give any representations or warranties in relation to the property either here or elsewhere, either on their own behalf or on behalf of their client or otherwise. They assume no responsibility for any statement that may be made in these particulars. These particulars do not form part of any offer or contract and must not be relied upon as statements or representations of fact. 2. Any areas, measurements or distances are approximate. The text, photographs and plans are for guidance only and are not necessarily comprehensive. It should not be assumed that the property has all necessary planning, building regulation or other consents and Savills have not tested any services, equipment or facilities. Purchasers must satisfy themselves by inspection or otherwise. Professional photography provided by Craig Sugden. March 2019