TRAVELODGE I Prime North Hotel

DENMARK HOUSE I LONDON I NW9 7BW TRAVELODGE BRENT CROSS I NW9 7BW Prime North London Hotel

Investment Summary • Opportunity to acquire a newly refurbished 128 bed Travelodge hotel and office in a highly accessible North London location • The hotel is let to Travelodge Hotels Ltd for 25 years from November 2017 • The office accommodation is let to the Secretary of State for Communities and Local Government until September 2023, with a break date in September 2020 • The Secretary of State for Communities and Local Government have expressed interest in removing their break clause in September 2020 • Travelodge rent is subject to 5 yearly rent reviews linked to CPI with a collar and cap of 1% and 4% • Travelodge passing rent is £655,922 per annum reflecting a low rate of £5,124 per bed per annum • Secretary of State for Communities and Local Government passing rent is £186,200 per annum • Total rent roll of £842,122 per annum • A substantial car park with allocated spaces • Freehold

We are seeking offers in excess of £16,000,000 (Sixteen Million Pounds) exclusive of VAT, reflecting a Net Initial Yield of 4.93% after purchasers costs of 6.74% TRAVELODGE BRENT CROSS I NW9 7BW Prime North London Hotel

BRENT CROSS TESCO BRENT SOUTH STAPLES CORNER TUBE STATION SUPERSTORE SHOPPING PARK RETAIL PARK BUSINESS PARK THE CITY

BRENT CROSS HOLIDAY INN LONDON TRAINS TO BIG YELLOW SHOPPING CENTRE - BRENT CROSS STAPLES CORNER SELF STORAGE AERIAL TBS

NORTH CIRCULAR ROAD

HENDON TRAIN STATION

M1

A5 TRAVELODGE BRENT CROSS I NW9 7BW Prime North London Hotel

A5183 A418 8 A120 10 A41 A10 Aylesbury 9 A1M A12 Hertford A418 M1 M11 Witham A41 Location Regeneration A414 4 Harlow Chiltern Hills St Albans 3 Brent Cross is on the western edge of Brent Cross is about to undergo major8A regeneration, AONB 8 7 A41 A10 21 A414 the , close with Hammerson and Aberdeen Standard A414 20 6 Potters Bar Cheshunt Epping to the boundary with the Borough of developing a new £4.5bn town centre which will be A4010 A413 23 Amersham 5 25 27 Barnet Brent. The area is bordered by known as Brent Cross . A fundamentalM40 Watford Loughton M25 M1 High A1 A12 Way to the east, the M1 to the west and element to the scheme is the £1.4bn redevelopment Wycombe 4 M11 M25 A130 3 4 Brentwood A406 28 the North Circular that connects the of Brent Cross Shopping Centre, which will include 2 A4130 M40 28 Rayleigh two roads and bisects the area. a 592,000 sq ft extension to accommodate 150 A127 Brent Cross 1 A10 29 Basildon A127 16 1 A12 new shops, 50 new restaurants and other leisure A404 A41 A406 A406 Brent Cross Shopping Centre, is a major A4074 A40 CENTRAL LONDON London Southend businesses including a luxury cinema. John Lewis, Maidenhead Hayes A312 DP World A13 City Airport London -on-sea scheme which covers c. 800,000 sq ft A321 A13 Gateway 8 which is the anchor tenant at the shopping centre, 15 1 30 River A4 and includes prime retailers such as A102 Port ames Windsor Heathrow A2 of has recently announced that it has signed a new Tilbury John Lewis, Zara and Marks & Spencer’s; M4 Reading M4 A316 Dartford lease and will refurbish its store as part of the A205 10 Gravesend it is located approximately 0.5 miles 1 A20 2 redevelopment. 11 Bracknell A23 to the east of the property. There is M3 Kingston A24 A2 Ascot 12 Upon ames 1 3 a major regeneration planned for the The wider scheme will cover A322 Weybridge 2 M3 A232 A33 3 M25 Rainham area which focuses on the shopping circa 141 hectares (370 acres) and provide 7,500 A3 4 M20 Camberley A243 Epsom 3 M2 centre. is new homes, 4m sq ft of new office space, three new 4 Woking 10 9 A217 2A 4 A22 M26 6 located within the Centre. schools, new public realm, enhanced community Leatherhead 5 M3 A331 A23 7 A3 facilities and significant transportBasingstoke improvements, M25 Sevenoaks A228 8 7 Maidstone Given the proximity of the hotel to 6 Hendon 6 HENDON WAYRedhill such as the creation of an additional train station on Aldershot Guildford central London the surrounding areas A21 A5 A26 the Midland Mainline. The development is expected to Dorking N CIRCULAR RD A229 are predominantly residential with some M1 London M23 create 27,000 new jobs and to complete in 2022. A31 Gatwick A22 Tonbridge industrial use adjacent to the major roads. A24 Airport Brent BRENT Royal Cross A3 Tunbridge CROSS Wells Situation Crawley BRENT PARK RD BRENT CROSS The site is located between Edgware FLYOVER

Road (A5) and the M1 just north of the 1 North Circular and its major junctions EDGEWARE RD A41 with the A5 and M1. The property is

next to a significant Vauxhall dealership A406 to the south, and to the north there are properties with industrial and retail warehouse use. The area designated for redevelopment is within 500m N CIRCULAR RD A5 walking distance. HENDON WAY CGI OF BRENT CROSS REGENATION TRAVELODGE BRENT CROSS I NW9 7BW Prime North London Hotel

Connectivity

RAIL

The immediate area is served by Brent Cross and Hendon Central Underground Stations, both of which are on the and located approximately 1 mile east and north east of the property respectively. Hendon Train Station is located approximately 0.5 miles to the north of the property, providing direct lines to London Blackfriars Station (30 mins) and London St Pancras International (20 mins) to the south and Luton Airport (30 mins) to the north via the Line. A new train station is planned on the Midland Mainline as part of the Brent Cross development.

BUS

There is a bus station within the shopping centre that provides a number of routes to both central London and the immediate area.

ROAD

The site, which fronts onto the A5, can be easily accessed via Junction 1 of the M1 or from the North Circular, the junctions for which are less than 150m from the property. Barnet Council, The Highways Agency and are working with developers to improve transport in the area with £200 million to be invested on road infrastructure. Improvements will include two new road and five new pedestrian bridges, which will significantly improve access to parts of the area that are currently difficult to reach. TRAVELODGE BRENT CROSS I NW9 7BW Prime North London Hotel

Description The hotel accommodation is on the top two floors of the original building and within the entire extension. The ground floor of the extension contains the reception, bar café and back office areas. The hotel’s 128 bedrooms are on the top two floors. The property, a former office has been converted to provide both office and hotel accommodation. The ground floor of the original building remains as office space and is separated by a central foyer. The accommodation splits into 5,293 sq ft (North) and 8,366 sq ft (West) providing a total of 13,659 sq ft. The north section is fitted out with interview rooms and waiting areas with the west wing containing open plan offices and meeting rooms. Investment Comparables Tenure Date Property Structure Rooms Term Review Structure Price Yield Freehold Avail. Travelodge London, Leytonstone FF 51 25 years 5 yearly RPI (1% & 4%) £10.00m 4.50% U/O Travelodge London, FC 88 25 years 5 yearly CPI (0% & 4%) £18.65m 4.40% Tenancy

U/O Travelodge & Halfords Built 96 17 years 5 yearly RPI (uncapped) £13.70m 4.50% The hotel is let to Travelodge Hotels Ltd for 25 years Whestone, London from November 2017 until November 2042. The rent Jun 2018 Travelodge Dagenham Built 82 25 years 5 yearly CPI (1% & 4%) £10.06m 4.65% is subject to five yearly rent reviews linked to CPI with an annual collar of 1% and cap of 4%. The passing rent is Jan 2018 Travelodge London, Harrow FC 102 34 years 5 yearly RPIX (uncapped) c. £16.00m 3.83% £655,922 per annum reflecting a rate of £5,124 per bed. The ground floor office accommodation is let to Secretary Rental Comparables of State for Communities and Local Government until September 2023 with a break in September 2020. Date Property Rooms Deal Type Rent Per Bed The passing rent is £186,200 per annum and is ‘subject Q2 2018 Travelodge Dagenham East 78 New Letting £4,811 to five yearly upwards only open market rent reviews. Q2 2018 Travelodge Dagenham 82 New Letting £5,706 The SSCLG have expressed interest in removing their break clause in September 2020. Q1 2018 Travelodge Leytonstone 51 New Letting £6,932 Q4 2017 Travelodge Whitechapel 88 New Letting £9,000 TRAVELODGE BRENT CROSS I NW9 7BW Prime North London Hotel

Covenant Travelodge Secretary of State for Communities and Local Government Travelodge Hotels Ltd is the UK’s largest independent hotel brand boasting over 558 hotels and 42,000 bedrooms across the UK as well The Secretary of State for Communities as 5 hotels in Spain and 12 franchises in Ireland. The budget hotel chain and Local Government (also known as The has recently announced plans to open 20 properties during 2018. Secretary of State for Housing, Communities and Local Government) is responsible for In 2012, Golden Tree Asset Management, Avenue Capital Group a range of UK government policy including and Goldman Sachs took ownership of the business. Since then, a community projects, regeneration, local significant investment program has taken place with close to £100 government, planning and housing. million deployed in order to modernise 35,000 rooms across all hotels. Furthermore, Travelodge continue to invest in the quality The office space is used by The London of their hotels, which has seen the roll out of the new SuperRoom Community Rehabilitation Company Limited concept, which feature a more stylish décor and extra amenities. whose main role is to manage the majority of offenders under probation supervision. It The latest results indicate that total revenue was up by 6.60% in 2017 works with the National Probation Service, to £637.1m, compared to the previous year. While occupancy rates which manages offenders who have been were “maintained” at 76.1% this increase was driven by strong revenue assessed as presenting high risk of harm to per available room (RevPAR) growth of 2.90% to £40.49. As a result, others, and helps to prevent reoffending and earnings before interest, tax, depreciation and amortisation (EBITDA) in make London safer by working together with 2017 were £112.4m. other criminal justice agencies, such as the Travelodge Hotels Ltd currently has a ‘minimum risk of business Police, Prisons and Courts. failure’ advised by Dun & Bradstreet (D&B) with a resultant rating of We consider this to be an undoubted covenant. ‘5A1’. The most recent financial figures are highlighted below.

31st December 31st December 31st December 2017 2016 2015 Turnover (£) £624,000,000 £587,700,000 £552,100,000

Pre-Tax Profit £45,200,000 £46,800,000 (£545,300,000) Net Current Assets £411,800,000 £369,900,000 £329,200,000 Tangible Net Worth £316,100,000 £271,600,000 £224,600,000 TRAVELODGE BRENT CROSS I NW9 7BW Prime North London Hotel

EPC VAT Proposal Contact Information Available upon request The property is elected for VAT and we We are seeking offers in excess of Shaun Roy anticipate the sale will be treated as TOGC £16,000,000 (Sixteen Million Pounds) T: 020 7861 1222 exclusive of VAT, reflecting a Net Initial M: 07957 342 285 Yield of 4.93% after purchasers costs E: [email protected] of 6.74% Hector Ahern T: 020 7861 1749 M: 07976 577 214 E: [email protected]

Luke Shackleton T: 020 7861 1112 M: 07976 729 924 E: [email protected]

KnightFrank.co.uk 55 Baker Street, London, W1U 8AN

Important notice. 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 has any authority to make any representations about the property, and accordingly any information given is entirely without respon- sibility on the part of the agents, seller(s) or lessor(s). 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. 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. 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. Design by carve-design.co.uk 13563