Lakeside Point Mansfield Road, Sutton-In-Ashfield Mansfield Ng17 4Hg

LAKESIDE POINT MANSFIELD ROAD, SUTTON-IN-ASHFIELD MANSFIELD NG17 4HG

Retail and Leisure Investment Opportunity 56% Long Income Travelodge with RPl-linked Rent Reviews MANSFIELD

KING’S MILL HOSPITAL

A38

KINGS MILL ROAD

LAKESIDE POINT

PAPER MOON NURSERY

SUTTON-IN-ASHFIELD

B6023 MANSFIELD ROAD

Annotation to be provided Executive Summary

• Fully let neighbourhood retail and leisure scheme, prominently located close to Kings Mill Hospital.

• 56% of the income is let to Travelodge for 19.5 years, (subject to landlord right to extend the lease) with the benefit of open market rent or RPI linked rent reviews, whichever is the higher.

• WAULT of 13.80 years to expiry (11.96 years to break assuming Travelodge lease has been extended).

• 95% of income let to national brands.

• The Travelodge rent will be topped up to £199,299 per annum, based on actual ONS RPI data to September 2018. Therefore, the total scheme rent is £344,441 per annum.

• There will be an opportunity for a further Travelodge rental increase in 2020 estimated at £211,908 per annum, based on the ONS RPI forecast data.

• Market and reversionary rents throughout with Travelodge rent reflecting a low average rent of £3,986 per key.

• We have been instructed to seek offers in excess of £5,100,000, subject to contract and exclusive of VAT reflecting a NIY of 6.34% assuming standard purchasers costs of 6.59%. Reflecting a low capital value of £192 psf.

• Based quoting price and using actual and forecasted RPI data from the Office of National Statistics (ONS), the anticipated running yield at the next Travelodge review (2020) is 6.57%. Location

Mansfield is located to the east of the M1 motorway in close proximity to Junctions 27-29 and has excellent transport infrastructure. The M1 serves Mansfield at Junctions 27, 28 and 29 providing excellent links to both the North and South of the country. The area’s central position means that majority of the country can be accessed within a 3 hour drive.

The Robin Hood railway line connects Mansfield with Worksop (to the north) and Nottingham (to the south). Nottingham offers direct service to cities across the country including London St Pancras. Phase 2 of the high-speed rail network (HS2) which will link the West Midlands to Manchester and Leeds may also bring future opportunities.

East Midlands Airport is only 30 miles away with many other airports across the country within easy traveling distance.

The subject property benefits from a 20-minute drive time catchment population of approximately 329,000 people. The population demographics show that within the given catchment area there are a greater number of persons in full-time employment than the UK average.

Situation

The scheme is situated on Mansfield Road (B6023) which lies approximately 1.3 miles north-east of Sutton-in-Ashfield and approximately 2.6 miles south-west of Mansfield.

The immediate surroundings comprise mainly residential dwellings with a large retail warehouse, The University of Nottingham (44,000 students) and King’s Mill Hospital LAKESIDE POINT to the north-east. Nearby commercial occupiers include B&Q and McDonald’s. Both Sutton-in-Ashfield and Mansfield have respective shopping centres.

King’s Mill Hospital is located 0.4 miles to the north-east of the scheme, the hospital B 6023 is a state-of-the-art medical facility providing over 600 beds and healthcare services to approximately 420,000 people across Mansfield, Ashfield, Newark, Sherwood and parts of Derbyshire and Lincolnshire. The B&Q unit is the only store in Mansfield and serves the surrounding catchment demographic.

The local plan has identified a target net increase of at least 7,683 dwellings will be delivered within the period 2016 to 2032, dispersed across the district. Since the identification of this target, the local council have recognised there to be approximately 8,467 houses deliverable by 2032, exceeding the initial target. Description Site / Planning

The scheme was constructed in 2005 and comprises built over two storeys with brick elevation and extends The property has a site area of 1.56 acres (0.63 four retail and leisure units and a hotel. National to 17,221 sq ft internally, each bedroom benefits from hectares) providing a site cover of 39%. operators include Tesco, Subway, Frankie & Benny’s a king sized bed, en suite bathroom facilities, flat and Travelodge. The retail and leisure units are of screen television, cupboard and a desk with chair. The 2004/0895 - Granted. Use Class C1 Hotel. single storey concrete frame construction with a property underwent a full internal redecoration in 2015 combination of cavity brick and render to the facades to bring the asset up to the latest brand specification. 2005/0008 - Granted. Use Class A1 Retail and under tiled and pitched roofs. A3 Restaurant. There is free customer car park providing The Travelodge provides a purpose-built hotel approximately 86 car parking spaces reflecting a comprising 50 en suite bedrooms. The property is ratio of 1:309.

N Tenure T Running Yield

Freehold. The landlord will provide a rental top-up for the Travelodge rent to the actual RPI level as at September 2018. Based on the quoting price and using actual and forecasted RPI data from

10 5 the Office of National Statistics (ONS), the anticipated running yield at the next Travelodge

22 Hotel review (2020) is 6.57%. El Sub Sta

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3 1 A

K E Total Scheme Lakeside Point S

I D

E Date Travelodge Rent p.a. Running Yield

V 1 I

0 E Rent p.a. 7 9 W

297 Minimum Travelodge 299 Rent (Actual RPI data 01/09/2018 £ 199,299 £3,986 £344,441 6.34%

Paper Moon for Travelodge only) Day Nursery Travelodge rent Shelter 140.8m

assuming ONS RPI 01/09/2020 £ 211,908 £4,238 £357,020 6.57%

1 3

6 forecast at next review

c 8 1

6 3

8 2 3

8 8 3 4 3 3

0m 10m 20m 30m 3

8 5 3 *RPI Data from Office of National Statistics

Tenancy

Unit Area Rent Rent ERV ERV Tenant Lease Start Lease Expiry Next Review Break Comments / Asset Management Name (sq ft) (pa) (psf) (psf) (pa)

City Centre Restaurant Tenant is to provide 6 months’ notice to Unit 1 (UK) Ltd t/a Frankie & 3,532 24/06/2005 23/06/2030 29/09/2020 24/06/2020 £60,112 £17.02 £20.00 £70,640 exercise break. 5 yearly upwards only rent reviews to OMV. Benny’s

Jalland & Co Ltd t/a Guarantor of SJC 15 Limited. Sublet to CSM Unit 2 983 03/11/2005 02/11/2020 - - £20,000 £20.35 £22.50 £22,117 Sutton Limited (t/a Subway) franchise at Subway £15,000 pa.

Strong trading Tesco Express serving local Unit 3 Tesco Stores Ltd 3,896 21/10/2005 20/10/2020 - - £50,000 £12.83 £14.00 £54,544 neighbourhood.

Rent commencement date 27/03/2019. Unit 4 Birds (Derby) Ltd 942 27/03/2018 26/03/2028 29/03/2023 27/03/2021 £15,000 £15.92 £15.92 £15,000 Rent to be topped up by the vendor at completion.

The Travelodge rent will be topped up to £199,299 per annum, based on actual £200,000 £11.57 ONS RPI data to September 2018. 5 yearly 17,221 £4,000 (est. £211,908 upward only rent reviews to higher of open Hotel Travelodge Hotels Ltd 29/09/2005 28/09/2030 29/09/2020 - £199,299 (£3,986 market rent or RPI. The landlord has the (50 rooms) per key subject to RPI option to extend the lease by up to 8 years per key) increases) (expiry 2038) for the consideration of £1 provided it is invoked between 28/03/2029 and 28/09/2029.

*WAULT of 13.80 years to expiry Total 26,574 £344,441 £364,929 (11.96 years to break)

*Assuming the landlord has exercised the right to extend the Travelodge lease to 2038. Covenant Analysis Accounts Summary

Travelodge Hotels Ltd Profit (Loss) Net Assets Turnover Year Tenant Before Taxes (Liabilities) Travelodge Hotels Ltd is the UK’s largest independent hotel brand boasting over FY 2017 FY 2017 FY 2017 558 hotels and 42,000 bedrooms across the UK as well as five hotels in Spain and 12 franchises in Ireland. The budget hotel chain has recently announced plans FY2017 Tesco Stores Ltd £40,134,000,000 £266,000,000 £7,765,000,000 to open 20 properties during 2018. In 2012, Golden Tree Asset Management, Avenue Capital Group and Goldman Sachs took ownership of the business. Since City Centre Restaurant (UK) then, a significant investment programme has taken place with close to £100 FY 2017 £524,136,000 -£36,029,000 £124,271,000 million deployed in order to modernise 35,000 rooms across all hotels. Ltd t/a Frankie & Benny’s

Furthermore, Travelodge continue to invest in the quality of their hotels, which FY 2017 Birds (Derby) Ltd £22,894,773 £3,366,345 £24,722,709 has seen the roll out of the new SuperRoom concept, which feature a more stylish décor and extra amenities. The latest results indicate that total revenue Jalland & Co Ltd t/a Subway N/A N/A £234,000 was up by 6.60% in 2017 to £637.1 million, compared to the previous year. While FY 2016 guarantor SJC 15 Ltd £28,139,586 £5,668,873 £20,650,234 occupancy rates were “maintained” at 76.1% this increase was driven by strong revenue per available room (RevPAR) growth of 2.90% to £40.49. As a result, earnings before interest, tax, depreciation and amortisation (EBITDA) in 2017 were £112.4million .

Travelodge Hotels Ltd currently has a ‘minimum risk of business failure’ advised by Dun & Bradstreet (D&B) with a resultant rating of ‘5A1’. The most recent financial figures are highlighted below.

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

Turnover £624,000,000 £587,700,000 £522,100,000 Profit/(Loss) Before Taxes £45,200,000 £46,800,000 -£545,300,000 Total Assets £689,700,000 £593,800,00 £535,900,00 Net Assets (Liabilities) £316,100,00 £271,600,000 £224,600,000 Service Charge EPC Proposal

The estate is subject to a service We understand the units for the following We have been instructed to seek offers in excess of £5,100,000, subject to contract charge that is fully recoverable EPC ratings: and exclusive of VAT reflecting a NIY of 6.34% assuming standard purchasers costs of from the tenants under the 6.59%. Reflecting a low capital value of £192 psf. charge provisions detailed in Unit EPC Rating Band each respective lease. 1 90 D Contact 2 66 C VAT 3 52 C For further information or to arrange an inspection please contact: 4 89 D Whilst VAT will be payable on Andrew McGregor Daniel Serfontein Travelodge 72 C the property we anticipated that E: [email protected] E: [email protected] the sale will be treated as a TOGC T: +44 20 7861 1531 T: +44 20 3640 7037 (Transfer of Going Concern). M: +44 7970 971 538 M: +44 7891 996 745

MISREPRESENTATION ACT: Knight Frank LLP give notice to anyone who may read these particulars as follows: 1. 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 nor any joint agent 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). 2. 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. 3. 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. 4. 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.