A Taste of Success Live & Let Live

Leisure Property Specialists

On Market

Should I stay or A taste of success Live & let live should I go? A guide through the process of New recruit Richard Thomas A look at the UK’s music venues renewing a commercial lease. dissects the restaurant market. and live music scene. Page 8-11 Thriving in uncertainty In this issue

Should I stay or should I go? 6-7 A taste of success 18-19 Phil Smith guides you through the process of Richard Thomas explores some of the thriving renewing a commercial lease. businesses in a turbulent restaurant market.

Restaurant Case Studies 20-21

Thriving in uncertainty 8-11 Pub Sales – A multi layered market 22-23 Director and Head of Hotels, Paul Hardwick, Director of Agency, Simon Hall, looks at pub analyses the latest UK hotel data. transaction volume across the North.

Hotel Case Studies 12-13 Pub Case Studies 24-25 Page 14-15 Make hay whilst the sun shines

Make hay whilst the sun shines 14-15 Live & let live 26-29 Rosie Hallam looks at strong Net Initial Yields in Kevin Conibear takes a look at the evolution of these uncertain times. the music industry across the UK.

Investment Case Studies 16-17 Leisure Case Studies 30-31

Page 18-19 A taste of success

Page 22-23 Pub Sales – A multi layered market Page 26-29 Live & let live

Important notice: Unless otherwise stated, all properties for sale or to let, have or are being dealt with on a Sole Selling Rights basis. The prices and other particulars regarding properties are correct at the time of going to press, November 2018. As prices can be altered by the vendor at any time, interested potential buyers should check the latest position with Fleurets before viewing. The information contained in this publication should not be relied up and is not to be reproduced in whole or in part without the expression permission in writing of Fleurets Ltd.

The performance of JD Wetherspoon, Stonegate and the vast majority of traditional tied pub tenants across the country should not go unnoticed.

Graeme Bunn Managing Director

Much like 1976, 2018 will live long in the memory and be referred to over the years and decades ahead during weather forecasts and climate change documentaries. Although the trading performance of wet-focussed pub operators may not last quite so long in people’s memories, the performance of JD Wetherspoon, Stonegate and the vast majority of traditional tied pub tenants across the country should not go unrecognised. JD Wetherspoon delivered However, it remains unclear as to The property market itself has column inches. Whether the deal 5.5% like-for-like sales growth (LfL) over the 13 weeks to 28th whether the worst is over for this experienced a comparatively buoyant means we will see Costa explode across October, whilst Stonegate delivered 4.6% LfL over the 40 weeks sector of the leisure property market. and healthy period, with notable the globe is unclear, but a more direct to 1st July. Similarly, Ei Group reported net income growth of 1.3% The issues of rising costs in relation transactions across the pub, restaurant consequence is likely to be further over the 47 weeks to 25th August, it being quite clear that the to food supplies, business rates, rent and hotel sectors; The Restaurant investment and growth of Premier warm weather drove us all to quench our thirst in pub beer gardens and labour remains as prevalent now Group (TRG) being particularly Inn as Whitbread use some of the across the country. as they did 12 months ago. The issue active, picking up Food and Fuel (11 disposal proceeds towards accelerating of labour supply is likely to become the leaseholds in London) for £14.9m, investment in the hotel brand. The warm weather coincided with the FIFA Football World Cup most concerning of these issues in the quickly followed by the agreement to which provided a trading bonanza for sports focussed venues. year ahead as net migration to the UK purchase Wagamama (133 restaurants The months and year ahead is likely to Stonegate achieved LfL growth of 19.2% during the World Cup, from other EU countries continues to in the UK, plus 63 worldwide) for be both challenging and exciting for with 4.5 million pints sold during the tournament. Personally, I am fall. As a result, this may lead to wage £357m in cash, in addition to the leisure property owners and operators not sure that England’s achievements at the World Cup were that growth as operators throughout the existing debt of £202m. The acquisition alike but, as ever, I am optimistic that notable, a record of played 7, won 3, lost 3, drew 1, would only leisure sector find securing good quality of Costa by Coca Cola, however, stole the conditions are right in the sector for amount to mid-table obscurity, but that debate is for another day. It candidates more challenging. most of the headlines and numerous success. is clear that all wet-led pub operators should give Gareth Southgate one on the house should he pop in! Stonegate Whilst the executives of the wet-focussed pub operators have been collectively patting themselves on the back, their counterparts over Leisure Property Specialists in the casual dining sector will have been fervently playing with Fleurets On Market their worry beads and asking whether 2018 can get any worse. The last thing that the likes of Prezzo and Carluccio’s would have Published by Fleurets Ltd wanted is a record breaking summer. 4 Roger Street, London WC1N 2JX

Enquiries: Lizzie Hawes - PR and Marketing Manager T: 020 7280 4745 E: [email protected] W: fleurets.com/onmarket

4 fleurets.com fleurets.com 5 w

Commencing ’54 Act proceedings: Should I stay Landlord Tenant 12 months before the contractual expiry at the earliest, the landlord or tenant’s solicitor may serve Notice to end the existing tenancy. The existing tenancy continues until Notice has been served specifying an expiry date. or should I go? The tenant’s solicitor must register a claim for a new lease with court before the expiry date of the existing tenancy as stated in the Notice. Failure to do so will result in losing rights of renewal.

18-24 months before lease expiry instruct a surveyor to advise on the market rent and formulate a strategy. Landlord Tenant Section 25 Notice Section 26 Notice

Landlord Tenant Do you intend to Do you want to renew Landlord Intends to Oppose Renewal Landlord and Tenant Intend to Renew renew or oppose? your lease? To oppose, the Landlord must either: To renew, in the Section 25 or Section 26 Notice:

In their Section 25 Notice, state the Section Propose terms for the renewal in the Notice. 30 ground on which they intend to refuse a Step one is to establish: Engage their surveyor to negotiate the market Philip Smith new lease. Is the lease protected by the Landlord & Tenant Act 1954? rent and terms for the new lease. Divisional Director Within two months of receipt of a tenant’s Section 26 Notice, respond with the ground The fall back is a renewal on the existing terms under S30 on which they intend to refuse a at market rent. Facing a lease expiry can be a daunting No Yes renewal. Rent at renewal can go up or down. prospect with an uncertain outcome. Excluded Lease Protected Lease Philip Smith, specialist in Lease Consultancy, guides both landlord Excludes renewal rights granted The tenant has rights to remain in and occupier through the process of under the `54 Act. occupation after expiry. Section 30: Grounds of Refusal DEAL NO DEAL renewing or refusing a renewal of a The tenant has no rights of Entitled to a new lease based on the commercial lease, under the Landlord No occupation after expiry. terms of the existing. a) Persistent breach of repair. & Tenant Act 1954. No recourse to court if agreement Landlord must satisfy legal grounds to b) Persistent delay in paying rent. cannot be reached. refuse a new lease. c) Other substantial breach of covenant. As this process map demonstrates, Recourse to court if agreement d) Landlord has offered alternative accommodation. the lease renewal process under the Landlord can take back possession for cannot be reached. e) Uneconomic subdivision of the premises. Heads of Terms agreed. `54 Act is complicated. Involvement any purpose. f) Premises are required for redevelopment. New lease completed. of courts, solicitors and surveyors g) Owner occupation. may seem daunting but, nevertheless, with the landlord and tenant aiming to secure the future use of the property, Action If yes - proceed to opposite page it is a pivotal event in a property’s life Dispute Resolution cycle and it is vital to be on top of the process. Tenants with excluded leases need to Remedy or Compensation act sooner rather than later. If the tenant does not accept the landlord’s grounds for refusing Grounds A-D can usually be remedied, a new lease, or if agreement of the lease terms or rent cannot be As ever, it pays to take early advice; We advise instructing a surveyor to which could avoid a renewal being reached, the dispute will be resolved by a court hearing. Fleurets’ nationwide team of Lease engage with your landlord well ahead opposed. Consultancy professionals have the of lease expiry if you wish to renew. Determination of rent at court involves surveyors providing Expert expertise to guide you through the If a renewal is refused, instruct Grounds E-G, if satisfied, will result in Witness evidence and the outcome is determined by a judge. process from start to finish. a surveyor to source alternative compensation paid by landlord to tenant Dispute resolution by court is a time consuming, lengthy and premises. based on length of occupation. costly process with an uncertain outcome.

Less than 14 years = 1 x Rateable Value. However, if all terms are agreed apart from rent, an alternative is More than 14 years = 2 x Rateable Value. PACT: Professional Arbitration of Court Terms. PACT is similar to a rent review Arbitration. Surveyors provide Valuation Reports and Replies to an appointed Arbitrator, who awards the rent. DISCLAIMER: The above is provided as a guide only, on a non-reliance basis; and Fleurets additionally recommend seeking specialist legal advice PACT is a faster and less costly process, with the rent determined before commencing the lease renewal process. by a property professional rather than judge.

6 fleurets.com fleurets.com 7 The market is experiencing a shift prospects are attracting very keen • Acting on behalf of the in buyer profile with European yields, Premier Inn Hotels and Coaching Inn Group, we Hotels and Middle Eastern investors, Travelodge investments frequently acquired the group’s 15th alongside real estate funds, family transacting. hotel, the 31 bedroom Swan offices, small and expanding Hotel in Stafford, from the multiple operators and other We are also witnessing the Lewis Partnership. longer term investors coming to growing occurrence of ground the fore. lease/income strips as an • We very recently concluded alternative method of financing the sale of the 60 bedroom with hotel owners/buyers Manhatten Hotel in Blackpool capitalising on the weight of to Daishs Travel off a guide money chasing long term secure price of £895,000, increasing 76 income investments, confident their portfolio to nine hotels. Travelodges that the value of their retained acquired for long leasehold hotel interests are supported by the strong prevailing With continued uncertainty c. £245m hotel market conditions. around Brexit, a large proportion of hotels now owned or having There also remains a steady been acquired by longer term flow of selective purchases by investors, transaction volumes Particularly strong appetite both established and expanding over the coming year are expected exists for investors looking to multiple hotel operators. to be more subdued, perhaps secure long dated, fixed income more aligned to 2017 levels. assets, hotels as an alternative • Earlier in the year Fleurets investment class being very much acquired two Surrey hotels Hotel trading performance across in the sights, an example of which on behalf of Young’s - the the UK remains robust. London being Secure Income REITS’ 43 bedroom Park hotel, hotels continue to perform at acquisition of 76 Travelodge Teddington and the 51 very high levels, albeit having Hotels for around £245million bedroom Bridge Hotel, somewhat plateaued, and the earlier in the year. Investments Chertsey, for around £11.6m. regions continue to demonstrate with index linked growth solid growth. Key performance

Approx. Reported Date Deal Hotels Keys Approx. Price Per Key/ Hotel Buyer Price Thriving in uncertainty Jun 2016 Atlas Hotels 47 5,575 £530m £95,000/£11.3m London & Regional Sep 2016 Travelodge Investments 55 £196m £11.3m Secure Income REIT

Sep 2016 Starwood Hotels & Resorts £9.5bn £3.6m Marriott International

Following a strong second including the sale of albeit with a much lower Oct 2016 Hotel Collection Hotels 5 665 £75m £112,800/£15.0m Cairn Group half, 2017 transaction the remaining Amaris contribution from single Mar 2017 Duchy Hotels 3 295 £12.5m £113,000/ £15.0m Fairtree Capital volumes in the hotel sector Hospitality Hotel Portfolio asset transactions. May 2017 Generator Hostels 12 £380m £42,400/ £4.17m Queensgate reached circa £5billion, a for circa £600million, Apollo significant leap from the disposed of its 20 unit Jul 2017 Crerar Hotel Group 13 853 Undisclosed Undisclosed FICO Castle (Subsidiary of FICO Holdings (UK)

previous year, driven by Ribbon Hotel portfolio for Jul 2017 Premier Inn Investments 4 340 £37.95m £111,600/ £9.49m Knight Frank Investment Management a significant number of c.£742m and Starwood Aug 2017 Qhotels Portfolio 26 3,683 £520m £141,200/£2.0m Aprirose Investments Central London trophy Capital exited from the 14 hotel sales in the first half unit Principal Hotel Portfolio c.£5bn Aug 2017 Portland Hotels 5 536 £40.0m £76,600/£8.0m Leonardo of the year followed by a for c.£830m. With a number hotel transactions Dec 2017 Jurys Inn 37 £800m £21.6m Fattal Hotels Group and Pandox AB (Publ) number of large portfolio of additional transactions transactions in the second in play, anticipated to 2017 Jan 2018 Amaris Hospitality Portfolio 23 4,000 £600m £150,000/£26.1m LRC Group half. This continued into complete prior to the end Feb 2018 Hilton Hotel Portfolio 7 1,334 £135m £101,200/ £19.3m Starwood Capital Group Paul Hardwick 2018 with further portfolio of the year, 2018 looks Director & Head of Hotels Mar 2018 IBIS Styles 4 497 £30m £60,400/£7.5m Starboard Hotels transactions dominating like it will be ahead of last the first half of the year, year by a significant margin, May 2018 Ribbon Hotel Portfolio 20 4,840 £742m £153,300/£37.1m Dayan Family

Jun 2018 Principal Hotel Portfolio 14 2,638 £830m £314,600/£59.3m Fonciere Des Regions

July 2018 Doubletree by Hilton 7 1,000 + Undisclosed Undisclosed LRC Group

8 fleurets.com Hotels

statistics reported by STR on a Expectations are that London Regionally, hotel occupancy has Ten years ago, around the pre- Whilst hotel pricing within Regional pricing is much more to receive maximum interest leisure and business spending; 12 month moving average basis is likely to continue with been relatively consistent during recession market peaks, it was prime Central London might closely aligned to traditional with the opportunity for visitors and their security whilst for the two years to July 2018 largely flat performance, with the last few years. Current common for hotel purchasers reflect trading income yields income considerations and competitive bidding. in the UK; operators and buyers are summarised below. forecasters anticipating a levels are enabling hotels to to pay prices that included around 5% in some instances return on capital requirements, in terms of formulating business potential small decline next continue to drive ADR, the 12 material hope value to reflect (profit multiples in excess of yields often typically fall Key to a fluid transaction projections, investment plans In the case of London, the year, primarily as a result of months to July 18 reflecting the untapped management 20 times), pricing levels are between 8.5% and 12.0% market is confidence; in terms and considering expansion 4.9% RevPAR growth to July occupancy levels slipping. 2.3% growth on the previous opportunity and investment often skewed by perceived (multiples of c.8 times to 12 of economic conditions; opportunities; funders and their 2017 has not been matched year, driving 2.5% growth potential. underlying real estate values times). consumers supporting hotel credit teams measuring ongoing this year, and although hotels in terms of RevPAR. Further (e.g. residential). trading performance through support and acquisition lending; continue to benefit from a growth, albeit more subdued, is In the current marketplace, Higher prices reflect those and sellers aspiring to maximise strong leisure market aligned to anticipated. buyers and their valuers are businesses that are in good exit proceeds. the weak pound and buoyed by 2018 more cautious, reflecting market condition, well operated, require a number of key events, hotels London RevPAR New hotel and room supply driven opportunity in pricing, 2018 minimum capital investment Mounting Brexit uncertainty face challenges from economic remains a dominant disrupter whilst not underestimating risk. +2.5% and are available with a 8.5% is certainly doing no favours uncertainty, significant increase -0.9% within the region of 10,000 Buyers are being more selective, supporting proven history of for confidence, however, some in hotel supply and suppressed new rooms expected to enter applying a greater degree of due successful past trade and profit - might say that this presents business demand. the supply chain in London and diligence in their appraisals. performance. These businesses 12.0% an exciting opportunity, and approaching 15,000 regionally offer buyers and funders greater so far at least, the hotel sector over the next year or two. confidence, and are most likely continues to thrive.

Regional RevPAR Typical regional yields

London UK Regional

£170.00 £100.00 90.0% £147.22 £148.11 £160.00 82.6% 81.9% 85.0% £90.00

£140.00 80.0% 76.0% £72.41 £80.00 £121.65 £121.25 75.8% £70.79 £120.00 75.0% £70.00

£100.00 70.0% £53.68 £55.01 £60.00

£80.00 65.0% £50.00

£60.00 60.0% £40.00

£40.00 55.0% £20.00

£20.00 50.0% £10.00 £0.00 £0.00 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018

ADR RevPAR Occupancy Occupancy RevPAR ADR

Source: STR

% Change 4.9% % Change 5.0%

3.7% 4.0% 2.9% 3.0% 2.5% 3.0% 2.3% 2.0% 2.0%

0.6% 1.0% 0.2% 0.0% 0.6% - 0.3% -1.0 - 0.9% 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 ADR RevPAR Occupancy Occupancy RevPAR ADR

10 fleurets.com fleurets.com 11 Park Hotel, Teddington & Bridge Hotel, Chertsey Ship Hotel, Brancaster

Acquisitions for Young’s Sale of North Norfolk boutique business

Fleurets acted on behalf of Young’s to acquire Acting on behalf of Flying Kiwi Inns, Fleurets sold this boutique the freehold interests of two high profile hotels business, comprising of bar/restaurant with 9 letting rooms on in Surrey. the North Norfolk coast to a local hotel group.

The Park is an iconic building with 43 rooms and substantial bar and restaurant space, centrally located in the affluent commuter town of Teddington.

The Bridge is in a prominent position, close to the M25 and Heathrow Airport, benefitting from 51 rooms and a large external terrace overlooking the River Thames.

Travelodge

Rental advice and negotiation assistance

Provided rental advice and negotiation assistance to the tenant, Travelodge Hotels Ltd, in respect of the rent review relating to their 392 bedroom City of London hotel.

Letting Rxxx Furthermore, acting on behalf of the site owner, Fleurets marketed a hotel development opportunity by Manor House tube station in North London, culminating in lease terms Pxxxxxxxx being agreed with Travelodge for the development of a new 140 bedroom hotel.

Swan Hotel, Stafford

Acquisition for Coaching Inn Group

Acting on behalf of the Coaching Inn Group, and aware of their acquisition requirements, Fleurets provided advice and worked with the vendor, the Lewis Partnership, to ensure a discreet and confidential sale.

Investments

Increased like-for-like sales have Earlier this year Fleurets sold In addition to our activity in been reported across a number the Walkabout, Leeds, operated buying and selling leisure property Investments of the major pub companies, by Stonegate, in an off-market investments, Fleurets continue to including Fuller’s, Young’s, City Pub transaction for £3,425,000 be well-placed to provide valuation Company, Mitchells and Butler reflecting a NIY of 4.85%. Fleurets advice in relation to acquisitions and Stonegate, and the likes of Ei has also recently acquired Riverside and have advised a number of Group Plc have reported growth in House in Bristol on behalf of institutional investors in this regard. net income. City Pub Company, who were the tenants in situ, for a sum of We would be pleased to discuss With a trip to the pub proving £2,100,000, reflecting a NIY of your current investments and more attractive than ever, 4.26%, thus demonstrating the future investment requirements. especially with the boost from demand for key sites and securing the 2018 World Cup and summer long term security over their heat wave, strong rental growth, occupation. especially across the south east, and low interest rates fuelling Our agency team has recently cheap finance, the attraction of the brought to the market two highly pub sector for property investment attractive, central London, tied has proven increasingly difficult to public house investments, the Red match. Lion in Holborn and Queen’s Larder in Bloomsbury, with guide prices Fleurets is active in the leisure of £2,150,000 and £2,250,000 property investment market place respectively. This follows the acting for investors, operators recent sale (subject to contract) of and individuals alike, advising on the Tollington Arms in Hornsey, off acquiring and disposing of such a guide price of £2,200,000, also assets. let on a tied lease.

1 1 The Old Red Lion, Holborn

Make hay whilst the sun shines Property & Location Walkabout Slug & Lettuce Zizzi Ask Block & Gasket David Lloyd Leisure Leeds Romford Tunbridge Wells Fareham Manchester Newbury

Date Granted, the first half of It was perhaps inevitable, Leases with long unexpired 2018 has hardly been however, that there would lease terms, robust August 2018 August 2018 July 2018 May 2018 March 2018 August 2017 pleasant for high street be some casualties. covenant tenants and retailers and casual dining annual index linked rental Price operators, but, as with the However, the challenges increases remain the key weather, and so many other of the casual dining market criteria, characteristics that £3,425,000 £3,115,000 £1,810,000 £855,000 £815,000 £17,585,000 things in life, it is likely to have not diluted investor are commonly seen in the Rent p.a. be just a phase! For several appetite as underlying public house sector, and years there has been strong fundamentals within the investors are keener than £176,866 £178,000 £72,990 £49,500 £46,765 £850,000 private equity investment leisure property market ever to tap into this sector into the casual dining remain strong, with keen of the market place. Rent Reviews sector, with new brands yields being achieved across Annual RPI 5 Yearly RPI being rolled out across the the country for the best 5 yearly OMRV Annual RPI 5 yearly OMRV £46,765 Rosie Hallam (2% & 4%) (0% & 4%) Senior Associate UK, seeking to satisfy our assets and opportunities, as apparent insatiable hunger the table illustrates. Net Initial Yield for more. 4.8% 5.3% 3.8% 5.5% 5.4% 4.5%

Net Initial Yield (NIY) stated after deducation of standard purchaser’s costs

14 fleurets.com fleurets.com 15 Tollington Arms, London

London investment sale

Fleurets has sold the Tollington Arms, an award-winning Arsenal FC pub, as an investment.

King Street Brewhouse, Bristol

Investment acquisition

Investment acquisition of this prime corner site in King Street, Bristol. The acquisition follows the letting of the property to City Pub Co, our sixth transaction on King Street.

Black Horse and Harrow & Four Thieves Project Beehive Walkabout, Leeds Valuation advice to Glenstone Property Group Advice on portfolio acquisition Investment disposal Provided valuation advice to Glenstone Property Group in relation to two Fleurets advised CBRE Global substantial public house investments, the Black Horse and Harrow, Catford as well Investors in relation to the acquisition Disposal of prime long income RPI linked as the Four Thieves in Clapham. of a portfolio of exceptional licensed investment let to Stonegate Pub Company leisure ground rent investments Limited, on behalf of institutional located across Scotland. pension fund client. Restaurants

for the year ending 26th March the group are broadening their 2017, The Delaunay announced reach, having recently opened 20 Restaurants increases in revenue by 2.3% to Stories in Manchester. £9.0m. The benefit of high end, The Wolseley and Brasserie Zedel destination restaurants is that Increased revenue increased their revenue by 3.3% more often than not, it is the 2.3% and 4.0% respectively over the name of the chef or the sheer to same period. reputation of the quality of food, £9.0m service and overall experience Exemplary service, a distinctive that drives trade, not whether offering, central accessible is it located in an iconic or high locations in combination with footfall position, although it The Delaunay spectacular settings financially does help! Consequently, being show their worth. in super prime central city locations is not always important. Corbin & King’s company In fact, many such restaurants accounts, interestingly highlight are in arguably slightly off pitch the added benefit of group locations by comparison. Increased revenue operations, being able to 3.3% share the central services of Notwithstanding this, demand to procurement, personnel and remains strong, especially as training. Furthermore, the group operators seek these alternative £13.0m also highlight staffing as a key locations in an effort to balance ingredient in their recipe for location with affordability, and success; ‘workforce [is] its most rental growth is being seen across important asset’. the board. The Wolseley

Similar to the new entrants in Fleurets is acting for the tenant, the casual dining market, high the renowned chef, Jason end restaurants are also on the Atherton, in connection with 1 acquisition trail. For example, the rent reviews of his Michelin Increased revenue Petersham Nurseries expanded starred restaurants, the Social from their primary Richmond Eating House on Poland Street, 4.0% location into Central London. Soho, and Pollen Street Social on to Pollen Street, Mayfair, seeking to £10.4m A taste of success Their Covent Garden site secure the best outcome possible supplemented its deli/retail in an ever competitive market operation, adding two restaurants, place. set around an internal courtyard It is easy to look at the opened their first London the operator’s first site Central London restaurants Brasserie Zedel and spanning over 16,000 sq ft. Armed with just a small handful of current restaurant climate site, in Camden, expanding in Europe. They will now have remained relatively stable The rental for this operation is examples I hope I have illustrated and see closures as the to the capital from their look to expand into other and continue to flourish. circa £2,000,000 p.a. and opened that the restaurant market ‘death of the high street’. At Brighton home. European cities as well as in February 2018. (not the food!) is indeed alive Fleurets we challenge that UK towns, with present Corbin & King, the operator of and kicking, and opportunities vision and see every closure Similarly, earlier this year I discussions for a second site six Central London sites, as well And expansion is not limited to continue to present themselves Increased turnover as an opportunity. was involved in a flagship in East London. as, Café Wolseley in Bicester London. D&D London, the group and be created. acquisition of Hai Di Lao, Village, illustrate this point 6% behind German Gymnasium, Desire to own a restaurant Piccadilly Circus (formerly a Whilst the casual dining perfectly. to Le Point de la Tour and Skylon, in the capital is relentless, museum) extending to 2,000 sector is somewhat in to name a few, have recently 1 The Wolseley £132.2m and these developments sq ft at ground floor and turmoil, new entrants are Irrespective of difficult reported strong financial results in the sector are giving 8,000 sq ft in the basement, able to take advantage of economic times, not to for 2017/18, with a 6% increase many emerging operators at a commencing rent of the units being vacated. mention a week’s closure and Richard Thomas in turnover to £132.2m. With a their chance to shine. For £1.25 million, equating to subsequent disruptions at The Divisional Director strong existing London portfolio, D&D London example in 2018 vegan a weighted ground floor In contrast to the casual Delaunay due to a close by fire, pizza concept, Purezza, rate of £200psf, marking dining sector, the high-end

18 fleurets.com fleurets.com 19 Source, Bristol The Coconut Tree The Coconut Tree

Lease for sale Retained agent

Fleurets is currently marketing the leasehold for this St Nationally retained for acquiring sites on Nicholas Market based café, restaurant and delicatessen. behalf of this exciting street food concept, currently trading in Oxford, Cheltenham and Bristol.

City Pub Co., Brighton Bury St Edmunds bar/ restaurant to let

Fleurets is currently marketing Leasehold sold to City Pub Co. Cupola House in Bury St Edmunds, Suffolk, an attractive Fleurets marketed the former Alfresco restaurant, and historic town centre occupying the historic Milkmaid Pavilion, on Brighton’s property. promenade. The property’s leasehold interest was sold to City Pub Co., who operate pubs across the South of England as well as London. Cupola House, Bury St Edmunds

Mem & Laz, Islington Purezza, London

Lease renewal for landlord Camden property sold Fleurets acted on behalf of the landlord, agreeing a new 15 year Sold to London’s first Vegan Pizza restaurant lease and a 65% increase in rent. operator, Purezza. The marketing generated 17 viewers and 8 offers.

20 Pubs

Fox & Bar Bistro Albert’s Corner Pubs Ripponden Crewe Freehold Freehold

Sold Sold

Yew Tree Inn Elephant & Castle Halifax Rochdale Freehold Freehold

Sold Sold

New Bridge Hanging Gate Inn Newcastle Macclesfield Freehold Freehold

Sold Sold

Toss O’Coin Eagles Head Huddersfield Carnforth Freehold Freehold

Sold Sold

Joiners Arms Gardeners Arms Morpeth Droylsden A multi layered market Freehold Freehold

Sold Sold Transactions in the pub demand and others businesses, which, despite have sold well to regional market have always been where demand is limited. being very profitable, solid brewers and developers dictated by the availability Understanding the precise operations, available at alike. Pubs in city areas have Hare & Hounds Miners Arms of finance, but the effect pockets of demand is critical exceptional value, have sold to local multiple on deals has never been so to assigning value. fewer buyers because of operators and many Scarborough Mold Freehold Freehold diverse, especially in the the amount of cash down suburban operations for north. High demand exists for payment needed. alternative use, including top end sites suitable for cafés, corner shops and for There is no shortage of managed operation, city With deposit, fees, SDLT, residential. Sold Sold buyers with plenty of cash centre sites, bottom stock and working capital or talented operators, end freeholds, leisure this is often 50% of the With values steadily however there are precious investments and nil purchase price. increasing, Loan to Value Crooked Billet Black Swan Inn Simon Hall few who have both. premium free of tie rates stuck at 60% and Gainsborough Kendal Director - Agency leaseholds. The overall volume of continued uncertainty over Freehold Freehold The combined effect is that transactions has remained Brexit, it doesn’t appear this there are several types of There is less demand for steady across the north. is set to change anytime property that are in strong mid-sized owner-operated Large managed pubs soon. Sold Sold

22 fleurets.com fleurets.com 23 The Apple Tree, Clerkenwell People’s Park Tavern, Hackney London Cocktail Club

Pub acquired Rent Review Off market leasehold assignment Acquired by Fleurets Fleurets acted on on behalf of Bohemia behalf of the landlord Fleurets sold the leasehold Club Ltd, the Apple with a rent review, of a prime Clifton Triangle Tree has now become achieving an increase bar to London Cocktail Club Clerkenwell’s newest in rent from £75,000 in an off market transaction, LGBTQ venue. p.a. to £175,000 p.a. thus marking LCC’s first site outside of London.

London Cocktail Club most recently added the multi award-winning Shoreditch cocktail bar, the Whistling Shop, to their estate, for which Fleurets acted on behalf of the seller.

Derry’s Cross, Plymouth The Bull, Ditchling

Prime city centre letting Valuation for secured lending purposes

Prime city centre letting to Fever Bars, a national late Valuation for secured lending purposes, of the night operator, located within the landmark Derry’s Cross Great British Pub of the Year 2016, the Bull at development. Ditchling, West Sussex. The pub has benefitted from bank financing to facilitate the expansion of its boutique letting bedrooms and restaurant.

Whistling Shop, London Aprirose Obar, Soho

Acquisition of Wear Inns Soho rent review

Fleurets acted on behalf of Aprirose in their Obar is an iconic late night venue located acquisition of North-East pub group Wear Inns for in the heart of Soho. Fleurets successfully £22.4m, which comprised of 25 pubs. contested the rent review acting on behalf of the tenant, limiting the increase to just 2.5%. Leisure

secure and improve Grassroots of land more recently known as Music Venues (GMV). There Temple Island, with the intention of building a 12,000 capacity Leisure remains approximately 400 GMV in the UK, but some of 28,659 arena. What followed was multi- the statistics are worrying. In jobs in live music million pound enabling works to 2007, there were 144 GMV in facilitate this. London, in 2016 there were 94, No. LJOBSOREM IPSUM DOL LOREM IPSUM DOLOR SIT AMET OR SIT LOREM IPSU M AMET DOLOR LOREM IPSUM SIT AME T LOR DOL EM IPSUM D 11:12:201411 L OR SIT OREM IPSU AME OLOR M T LOREM IPSUM D SIT AME 014 DOLOR S T LOREM IT AME OLOR IPSUM DOL T LORE SIT A OR S M IPSUM D MET LOREM IT AM OLOR IPSUM ET LOREM IPSUM DO SIT AM DOLOR S ET LOREM IT A L IPS METLOREM OR SIT UM DOL IPSUM AMET LOR OR SIT D EM IPSUM AMET OLOR S A change of Mayor led to a a 34.7% reduction in trading D LOREM IT AM OLOR S IPSUM DOL ET LOREM IPSUM DOL IT AME OR T LOREM I SIT AM OR SI PSUM ET LOREM T AM DOLOR IPSUM DOL ET LOREM SIT AM OR SIT IPSUM DO ET LORE AME L M IPSUM T LORE OR SIT DOL M IPSUM AMET LOREM IPSUM DOL OR SIT D AMET OLOR LORE SIT AM OR S M IPSUM ET LOREM IPSUM DOL IT AME DOLOR T LOR SIT AM OR SIT EM IPSU ET LOREM IPSUM AME M DOL T LOR OR SIT DOL EM IPSUM DOL AMET LOREM OR SIT I AMET OR PSUM D LOREM IPS SIT AME OLOR SIT UM T L LOREM AM DOLOR OREM IPSUM IPSU ET LOR SIT LOREM M DOL EM IPSU AMET IPSU DOL L OR SIT M D M D LOR OR SIT OREM AME OLOR OLOR S EM IPSUM DOL AMET IPSUM T LOREM IPSUM SIT AMET LOREM IT AME LOREM IPS DOLOR IPSUM DO T LOREM OR UM LOREM SIT A DOL L IPSUM DOL LOREM SIT AME DOL IPSUM MET L OR SIT L OR SIT IPSU T L OR SIT D OREM IPSUM AM OREM I AME OR series of cost reviews calling space. Of the 25 venues that M D OREM AME OLOR ET PSUM T LOR SIT AME OLOR S IPSUM T SIT AMET DOL DOL EM IPSUM DOL T LORE IT AME DOL OR SIT LOREM IPSUM DOL OR SIT M IPS T LOR OR SIT AMET AME OR UM DOL EM AME T LOR SIT AME OR S IPSUM DO T OR S EM IPSUM T LOREM IPSUM DOL IT AM LOR SIT LORE IT AM DOL ET LOR AME M IPSU ET OR S EM IPSU T M DOL LOREM IT AM OR SIT M D L OR IPSUM DOL ET AM OLOR OREM IPSUM LOR SIT ET E AMETL SIT AM M IPSUM DOL O OR SIT ET DOLOR SIT REM IPSUM AMET L OR S OREM IPSUM DO IT AME DOLOR LOREM I AMET T LOR SIT AMET PSUM DOL LOR S EM IPSU LORE IT AM M DOL OR S M IPSUM DOL E OR S LOREM IT AME T LOREM IT AM IPSUM DOL T LOREM OR IPSUM D ET OR S IPSUM DOL LORE SIT AME OL LOREM IT AME M IPSUM DOL T LOR OR SIT T T L OR SIT EM I AMET OREM AME AM OR S PSUM D IPSUM T ETLOREM I IT AM OLOR DOLOR S ET L SIT AME IT AM PSUM DOL OREM I T ET AME OR S PSUM DOL T LOREM I IT AMET O PSUM LOR R S IT A DO EM IPSUM DOL MET LOR SIT AME OR SIT T LOREM IPSUM D OLOR the project into question, helped launch Oasis’ career in SIT 1993, only twelve remain open. despite the investment and an The reasons behind this can be To demonstrate why this was experienced operator secured attributed to repair and upkeep, brought in: for the venue. Following the rents and business rates, publication of a Value for Money licensing and redevelopment, Bristol, widely recognised as a report by KPMG, the Mayor where landlords can potentially city championing independent announced in September that maximise value from the artists has reportedly lost 35% the arena would not be built building. Concerns surrounding of its venues over the past on Temple Island. In parallel, a this were recently addressed by decade. Planning changes privately owned firm entered new planning policy. introduced in 2013 that were the debate promoting an arena designed to encourage more at Filton Airfield, some five miles residential development from the city centre, which by making change of use they propose will be privately 30.9 for buildings easier had the funded. million unintended effect of harming people attended live music live music venues as developers At the time of writing arguments events in 2016 brought forward schemes in continue, with new proposals traditionally non-residential, emerging, but in my view not locations. Research in 2015 building an arena in the city by Bucks New University, centre is a missed opportunity. supported by UK Music, found This would have a significant 50% of dedicated music venues benefit to the surrounding On 24th July 2018, the in Bristol were under threat businesses, whereas building an Agent of Change principle from development, noise or out of town arena threatens to was introduced as part of planning issues. These included undermine the city centre. One the National Planning Policy well-known venues such as only needs to visit a city such as Live & let live Framework. This seeks Thekla, The Fleece and Fiddler’s Cardiff to witness the vibrancy to provide protection to Club. The Agent of Change large music venues bring to businesses and community principle was introduced to a city and its economic and Ed Sheeran began here, before facilities from newly granted protect such venues. cultural scene. The additional In 2017, music contributed such as concerts and These headlines are they hit the iconic status they planning consents. The principle benefits are significant, with £4.5bn in Gross Value theatre generated £2.1bn positive, but there are have today, the former having states that existing business With pressures on smaller smaller gigs being held in GMV Added (GVA) to the UK, in 2017, with concert- some underlying challenges recently completed their Head and facilities should not have venues, larger operators when major artists visit and the up 8% over two years, going accounting for more affecting operators, Full of Dreams tour, reportedly unreasonable restrictions encounter issues in securing buzz will be lost at an out of according to UK Music’s than 50% and forecast 7% especially smaller venues grossing $523 million. placed on them as a result of sites and being able to deliver town site, lacking connectivity Measuring Music 2018 growth in 2018. that are the breeding development permitted after these. Whilst considering to Bristol’s existing music scene. Report. Live music increased grounds for emerging talent. The live music scene in the UK they were established. The Bristol, one cannot ignore 14% in 2016 to make up Despite being in an age of is diverse, from small intimate responsibility to protect venues the ongoing saga of Bristol’s We have asked industry experts almost £1bn of that figure TV talent shows and social gig venues to large scale arenas, from issues such as licensing, long running arena project. for their views on the UK live and 30.9 million people media catapulting unknown 14% stadia and festivals. Operated by trading hours and noise now lies Arguments to rectify the fact music scene:- attended live music events increase artists to stardom, the global companies, this is a highly with the developer. that Bristol remains one of across the UK, a 12% majority of acts start from in 2016 successful and competitive the only major cities without a increase on the previous nowhere, performing in Kevin Conibear spectrum, but there are areas purpose built arena have been year. The live industry small independent venues, Head of Urban Markets that need protection. Created in ongoing since 2003. It appeared supported 28,659 jobs in honing their talents, before 2014, the Music Venue Trust is a solution was found in 2015, 2018. Deloitte reported hitting the mainstream. a registered charity to protect, when the city acquired an area that live performances The likes of Coldplay and

26 fleurets.com fleurets.com 27 Leisure Q&A

MARK DAVYD DAN ICKOWITZ-SEIDLER GRAHAM WALTERS

What is your role/company? What is your role/company? What is your role/company? I’m the CEO and founder of the Music Venue Trust, a Over 15 years ago I created Propaganda, the UK’s biggest I’m Chief Operating Officer of UK venues for Live Nation registered charity which acts to protect, secure and improve weekly club night. We occasionally feature live music at Entertainment and Academy Music Group Ltd. I have grassroots music venues in the UK. I have been working in the event, and Ed Sheeran has even played. We also co- been working in the live music business for over 25 the live music industry for 36 years. own several live music venues with the promoters MJR. years now. Collectively, we own and operate 22 venues Our flagship and first venue was Tramshed in Cardiff, which nationwide in 14 major cities, with capacities ranging What changes have you witnessed in this time? launched in 2015 and has a 1,000 capacity as well as events from 250 up to 7,500. Many of our venues are of That’s a small question with a massive answer. The entire space and a boutique cinema. Following its success we have significant historical importance, some with Listed status structure of the music industry has changed, having purchased The Warehouse in Leeds, Plug in Sheffield, The and we have four prime sites in the capital, including the massive impact on the sustainability and profitability of Assembly in Leamington Spa and former Rainbow Warehouse O2 Academy Brixton and O2 Shepherd’s Bush Empire. grassroots venues. One example is the removal of tour in Birmingham, which we are reopening shortly as The Mill. support budgets by major labels, a result of the downturn What are the biggest threats facing the industry? in business provoked by online piracy and streaming, which What changes have you witnessed in this time? Increasing rents is an issue, and it’s also becoming started in 2004. This had a huge impact on grassroots The growth of online music platforms and YouTube has had more challenging to find suitable buildings. Licensing touring artists, which these venues have been asked to pick a positive impact on the live music industry. Never has there and planning laws are ever-changing, as is the rise of up. Subsequently, emerging artists are struggling to make been such easy access to music. Subsequently, listeners more city centre and residential housing nearby to live tours work. That’s just one example, there are dozens and are easily able to find new artists, which in turn means that entertainment venues, a subject that has given rise to the dozens more - the explosion in upper level ticket prices and artists are getting bigger quicker. With the widely-reported Agent of Change Principle to protect music venues. the complete standstill in grassroots ticket prices, I could decline in music sales, live touring has become more crucial What are your predictions for the industry going go on for quite a long time. to artists and for many it has become their predominant forwards? income stream. What are the biggest threats facing the industry? Music has never been more varied and musical trends That, thinking about all the challenges, we sit still and hope What are the biggest threats facing the industry? evolve so much faster than they used to, which is partly someone else will sort it out for us. The outcome of that With the continued growth of festival markets, bands and down to streaming, digital services and social media. approach is that we continue to haemorrhage grassroots artists do not tend to tour in the summer. This makes the Bands play our much larger venues far more quickly than music venues at an alarming rate. If new artists don’t have trade very seasonal for live music and consequently to be they would have say 10-20 years ago. Production values a stage they can walk on to for their first gig, we don’t a successful live music venue it is crucial that you have a are now incredible, with limitless possibilities in staging, have future festival headliners. We need to align the secondary income stream either through regular club events special effects, technical, sound, lighting and video. whole music industry behind this basic concept. Every one or having a multi-purpose venue space that can be used for of us has a stake in the success and sustainability of our weddings and private events over the summer. As technology advances, there are far more opportunities grassroots music venues. We need to act on that stake, not to evolve in the live industry for sure, from how fans permit those venues to fail through inaction. What are you predictions for the industry going forwards? connect with artists, to developments we’re seeing in People continue to crave live music experiences which can What are you predictions for the industry going Virtual Reality, but the passion for the live experience not be replicated online, I think we’ll continue to see growth forwards? in-person will long continue. Digital advancements will in the live music sector despite a challenging climate in some That grassroots music venues will win. Because it is in also improve the ticketing systems further. Our partners other areas of the entertainment industry. these venues that the real enthusiasm and passion for at Ticketmaster are constantly working to improve music still beats strongest. technology to get tickets directly into the hands of fans.

28 fleurets.com fleurets.com 29 Deal Pier Kitchen, Deal Adventure Leisure

Acquisition of sites

Currently instructed by Adventure Leisure, the fastest growing adventure golf brand in the UK, to assist with the search for new sites.

Letting on behalf of Dover District Council

Instructed by Dover District Council, Fleurets successfully let the RIBA award- winning structure at the end of Deal Pier in Kent to Deal Pier Kitchen.

Wildmoor Spa & Health Club, Stratford-upon-Avon Salterns Holiday Village Cottages, Isle of Wight

Valuation services for acquisition of leisure club and spa 41 holiday cottages for sale

Fleurets provided valuation services to assist NatWest Bank on their Fleurets is currently marketing a customer, Bannatyne Group’s acquisition of this high quality leisure club development of 41 holiday cottages in the and spa facility. 11.5 acre resort of Seaview, Isle of Wight.

Pure Gym, Croydon

Leasing to Pure Gym

Fleurets acted on behalf of the landlord leasing c.18,500 sq. ft. to Pure Gym at a rent of £191,500 p.a. London North West East North 4 Roger Street London 0161 683 5445 01223 402600 0113 234 0304 WC1N 2JX [email protected] [email protected] [email protected] 020 7280 4700 [email protected]

West & South Wales Midlands South

0117 923 8090 0121 236 5252 01273 429500

[email protected] [email protected] [email protected]

Leisure Property Specialists

Important notice: Unless otherwise stated, all properties are being dealt with on a Sole Selling Rights basis. The prices and other particulars regarding properties are correct at the time of going to press, November 2018. As prices can be altered by the vendor at any time, interested potential buyers should check the latest position with Fleurets before viewing. The information contained in this publication is not to be reproduced in whole or in part without the expression permission in writing of Fleurets Ltd.