TRAVELODGE PWLLHELI, GWYNEDD, NORTH WALES

HOTEL FORWARD FUNDING INVESTMENT OPPORTUNITY Insert large photo 2

INVESTMENT SUMMARY

• Forward funding opportunity to acquire a freehold hotel in a prominent location in Pwllheli on the coastline of the Llyn Peninsula, an Area of Outstanding Natural Beauty

• Pwllheli is approximately 6.5 mils east of Abersoch, 14 miles west of Porthmadog, 40 miles south of Anglesey, 70 miles west of Wrexham and 150 miles north from Cardiff

• Highly accessible via public transport and within short walking distance of Pwllheli town centre

• The property will be built over three-storeys and include 68 en-suite bedrooms together with a bar and a cafe restaurant and 65 car parking spaces, plus an additional three accessible spaces

• The property will be let to Travelodge Hotels Ltd for 25 years upon practical completion on an agreed rent of £323,000 p.a. (£4,750 per bed p.a.) subject to five yearly rent reviews linked to CPI with a collar and cap of 1% and 4%

• Freehold • The developer, Liberty Properties, has an exceptional track record in commercial property development including developing a number of Travelodge hotels We are seeking offers in excess of £5,770,000 (Five Million Seven Hundred and Seventy Thousand Pounds) reflecting a Net Initial Yield of 5.50% assuming purchasers costs of 1.80%, and a capital value of only £90,000 per bedroom. 3

LOCATION

Pwllheli is a coastal town on the north west coast of Wales and is known as the capital of the Llyn Peninsula, an Area of Outstanding Natural Beauty covering 62 square miles. The town is also in close proximity to Snowdonia National Park which is located approximately 17 miles to the east.

Pwllheli can be accessed via the A497 from the east which connects the town to Porthmadog and the A499 which connects with Caernarfon. The town is also well serviced by public transport networks including the Pwllheli bus station in the town centre that provides routes throughout Pwllheli as well as the wider Llyn Peninsula area. Pwllheli train station offers a direct service to the Cambrain Coast line running to Machynlleth with services running on to Shrewsbury and Birmingham, whilst also providing connections to the regional rail network. Over the next five years, KeolisAmey, which will operate the rail network in north Wales from October 2018, expect to increase the number of services to Pwhllheli station as well as reduce fares to encourage greater travel to the area.

Pwllheli also boasts a retail offering that includes Asda and Lidl supermarkets, as well as a Costa Coffee and a number of pubs and restaurants in the town centre.

Due to its prime location in the Llyn Peninsula and close proximity to Snowdonia, Pwllheli and the immediate surrounding area attracts over 8 million visitors a year and has a vibrant tourism economy. 4

SITUATION

The site is situated on the western side of Pwllheli Harbour to the south east of the town centre, and is located on the very popular and busy marina development, adjacent to the recently constructed Plas Heli sailing academy.

Access is provided by Marina Road which connects the marina at the Aberech Road (A497) to the east of Pwllheli town centre. The site can also be accessed by bus along Marina Road and easily accessed by train as Pwllheli train station is approximately 0.5 miles to the west of the site.

Plas Heli is the Welsh National Sailing Academy that acts as the Royal Yachting Association training centre for sailing squads and hosts both international and national dingy sailing events every year. These events are usually held every weekend in the spring and summer months and attract hundreds of people to the area during each event.

The proposed Travelodge facility will be the first budget hotel offering in Pwllheli and the surrounding area in the Llyn Peninsual. Due to the its prime location next to Plas Heli, which attracts thousands of visitors every year, as well as the significant undersupply of budget hotels in the region, Travelodge Pwllheli is expected to perform strongly upon practical completion. 5

TENURE COVENANT Audited 2017 results show the company total revenue increasing by 6.6% to The property is held freehold. Travelodge Hotels Ltd is the UK’s £637.1m from the previous year with largest independent hotel brand EBITDA rising by £2.3m to £112.4m. TENANCY boasting over 550 hotels and 42,000 The positive financial figures were bedrooms across the UK and is wholly achieved as a consequence of RevPAR The property will be let to Travelodge Hotels owned by a syndicate of Golden Tree going up by 2.9% to £40.49 and ADR Ltd on a new lease for 25 years from Asset Management, Avenue Capital increasing by 2.8% to £53.19, practical completion, which is expected at Group and Goldman Sachs who took occupancy remained steady at 76.1%. the end of Q3 2019. The agreed rent is ownership of the business in 2012. £323,000 per annum, reflecting £4,750 per Over the next three years, Travelodge bed per annum and will be subject to five Since 2012 a significant investment expects to open 30 hotels with over yearly rent reviews linked to CPI with a program has taken place with close to 2,500 rooms with 15 of these due in collar of 1% and a cap of 4%. £100m deployed in order to modernise 2018; demonstrating the continuing 35,000 rooms across the portfolio. success and ambition of the business. The tenant also has an option to renew for a Travelodge continues to invest in the further 25 years upon expiry of the lease. quality of their hotels, continuing the roll Travelodge Hotels Ltd currently has a out of the new SuperRoom concept ‘Minimum’ risk of business failure ongoing through 2018. advised by Dunn & Bradsreet (D&B) with a resultant rating of ‘5A1’ and are seen as an attractive investment tenant.

31/12/2017 31/12/2016 31/12/2015

Turnover £624,000,000 £587,700,000 £552,100,000

Profit / (Loss) Before £45,200,000 £46,800,000 (£545,300,000) Taxes Net Current Assets Less £411,800,000 £366,400,000 £318,200,000 Current Liabilities Tangible Net Worth £316,100,00 £271,600,000 £224,600,000 6

DESCRIPTION

The property will be arranged over ground and two upper floors with a total of 68 beds. All rooms will be fitted to the latest Travelodge specifications and will include a range of double and family rooms. On the ground floor, there will be a reception, bar café and restaurant. Additionally, there will be a minimum of 65 car parking spaces, plus three accessible spaces, that will be located to the front of the property for guest use only.

Below are to scale architect drawings of the proposed floor and site plans.

Ground Floor First & Second Floors Site Plan 7

DEVELOPER TRACK RECORD

The development will be undertaken by Liberty Properties HQ, Chester Developments Ltd which is a Chester based development and £72.5m redevelopment of Cheshire Police HQ investment company, operational in the North West, Midlands and funded by Deutsche Bank. The 250,000 sq. ft. Wales, and have been established for over 30 years. redevelopment comprises of 80,000 sq. ft. of offices, 34 apartments and a 70 bed Abode Hotel. Liberty specialise in providing business with property solutions and have an exceptional track record in all commercial sectors. Waitrose & Travelodge, Egham Liberty have already developed two Travelodge hotels in Egham, £11m redevelopment funded by Ropemaker of an above a Waitrose store and in Stafford on the Hough retail and existing town centre car park to provide 174 space leisure park. basement car park, with a 24,000 sq. ft. Waitrose food store and 82 bed Travelodge above. For further information on Liberty please visit www.libertyprops.com.

Stafford Leisure Park, Stafford Final phase of the redevelopment for Liberty Mercian Ltd as client of the former Alstom Site to provide a 72 bed Travelodge, Pizza Hut and drive thru KFC.

PROFESSIONAL TEAM

Architect & Cost Consultant Engineer Planning Consultant PROPOSAL

Offers in excess of £5,770,000 (Five Million Seven Hundred and Seventy Thousand Pounds) are invited exclusive of VAT, reflecting a Net Initial Yield of 5.50% after assuming purchasers costs of 1.80%.

CONTACT For further information please contact the below:

Charles Fletcher Tom Dawson Chris Field +44 (0) 207 861 1450 +44 (0) 161 833 7717 +44 (0) 207 861 1088 +44 (0) 783 857 5063 +44 (0) 746 872 7122 +44 (0) 797 673 0719 [email protected] [email protected] [email protected]

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 responsibility 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 all that 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. June 2018.