SECURE INCOME LEISURE INVESTMENT Neath, Glamorgan, SA10 6GZ gva.co.uk/8374 EXECUTIVE SUMMARY • Located 2 miles west of Neath and • Over 3,700 members • A purchase at this level would reflect a yield 8 miles North East of Swansea profile, assuming GVA RPI forecasts and • Rental income of £268,794 per annum, let acquisition costs of 5.80%, of :- • Situated adjacent to Junction 43 of the M4 off a low passing rent of £3.35 psf overall motorway per annum Acquisition 6.35 • Purpose built flagship health and racquets • Yearly reviews from July 2017 will be 2017 6.59 club comprising approximately 80,162 sq ft increased in line with RPI subject to a collar 2018 6.80 of 1% and a cap of 4% per annum • Facilities include aerobics studio, indoor 2019 7.01 heated pool, outdoor pool, spa, 3 squash • Freehold / Part leasehold 2020 7.26 courts, 6 indoor tennis courts, 4 outdoor 2021 7.53 tennis courts, basketball court and salon • Offers are sought in excess of £4,000,000 (Four Million Pounds), subject to contract 2026 8.94 • Let to the strong covenant of Virgin Active and exclusive of VAT 2031 10.64 Ltd and Virgin Active Health Clubs Ltd, • The proposed price reflects a capital value per expiring 13th July 2036, providing a term Average yield over term 9.15 sq ft of £49.90, which is below replacement cost certain of 21.7 years for the club. A40 A479 Cheltenham SCOTLAND Gloucester Camarthen Abergavenny Haverfordwest A464 A40 A470 A4069 Glasgow A467 EdinburgA4042h A476 Merthyr Tydfil Lydney 48 M4 A465 Llanelli 47 46 45 A470 Newcastle A48 Pembroke A4107 44 43 A484 NORTHERN Chepstow M5 A483 Neath IRELAND M48 A4118 Swansea Pontypridd Belfast M48 Pyle Newport 36 37 33 34 Leeds 19 18 A4232 Bridgend M4 Swansea Bay Cardiff Dublin Manchester A4061 Bristol IRELAND LOCATION SITUATION Neath is located in the principal area of Neath The premises occupies the adjoining site to Birmingham Port Talbot, Wales. Historically in Glamorgan, the the Holiday Inn Express and a Harvester Pub town is located on the river of the same name. Restaurant, as well as Neath Llandarcy College M5 Basingstoke The town is served by the South Wales Main Campus, situated on the other side of the B4290, WALES ENGLAND Line at Neath railway station, and Neath bus comprisingLynton a purpose built sports facility where Andover station at Victoria Gardens. Rail and bus services students undertake practical and theoretical operate to the neighbouringIlfracombe towns as well as studies. Minehead Shrewton Neath Glastonbury A361 A303 Cardiff Central, Swansea, Bristol Parkway and Cardiff London A303 London Paddington. The A465 skirts the town to St. Modwen is currently undertaking a major Bristol23 A36 the north east and provides a link to the M4. development (the Coed Darcy Development) BridgewaterCardiff near Skewen in Neath Port Talbot which will A39 M3 The property is located adjacent to Junction 43 provide “homes, schools, parks, playing fields, of the M4 Motorway, approximatelyBar 3 kmnstapl (2 miles)e shops, offices, bars and restaurants in a project from Neath Town Centre and approximately expected to become a bigger version of Prince A303 Wiveliscombe Salisbury Winchester 12 km (8 miles) from Swansea City Centre. Charles’s Poundbury Model Village in Dorset”. Gillingham Taunton M5 Shaftesbury 14 M27 4 A358 A35 5 Witheridge 27 2 Ringwood Southampton Hatherleigh A30 Lymington Portsmouth A35 Exeter A35 30 Bridport Sidmoth Bournemouth Exmouth Weymouth Swanage A40 A479 Gloucester Cheltenham DEMOGRAPHICSCamarthen Neath has a reported population of 50,658 (2011 Census), with the greater Neath Port 30mins Talbot’s population increasing by almost 4% Abergavenny to 139,800 since the 2001 Census. Swansea’s Haverfordwest population increased from 223,293 in 2001 to A464 A40 239,000 in 2011. A4069 A470 The area benefits from an above average proportion of subscriptions to sports and A467 social clubs per person, and a higher level of A4042 participants in sports activities in comparison with the UK average. A476 Merthyr Tydfil Lydney 48 M4 15mins A465 Llanelli NEATH 47 COMPETITOR A470 Pembroke C 46 45 A48 ANALYSIS 44 A4107 Tenby D 43 5mins A. Life Health and Fitness Club, Enterprise Park, A484 A Chepstow M5 Swansea, SA7 9EG A483 (Virgin Active) B. The Dragon Hotel, 29 The Kingsway, SA1 5LS B Neath C. DW Sports and Fitness, Llanelli, SA14 9UY M48 D. Evolution Health and Fitness Centre, Swansea Pontypridd Cross Hands, SA14 6RJ A4118 Port Talbot M48 Pyle Newport 36 Swansea Bay 37 34 33 19 18 Bridgend A4232 Cardiff M4 A4061 Bristol M5 Basingstoke Lynton Andover Ilfracombe Minehead Shrewton A361 A303 Glastonbury A303 23 A36 Bridgewater A39 M3 Burton Barnstaple A303 Wiveliscombe Salisbury Winchester Gillingham Taunton M5 Bampton Shaftesbury M27 14 A358 4 A35 5 Yeovil Witheridge 27 2 Tiverton Ringwood Southampton Hatherleigh A30 Lymington Portsmouth A35 A35 Exeter 30 Bridport Sidmoth Bournemouth Exmouth Weymouth Swanage DESCRIPTION The purpose built flagship health and fitness club comprises a modern steel framed construction with part steel and glazed elevations under a profile steel barrel roof. Connecting the health and fitness club is a single storey tennis facility under a dome shaped lightweight construction. The club caters for the following facilities:- GROUND FLOOR • Crèche • Health and beauty salon • Café • Bar with kitchen facilities • Indoor heated swimming pool • Sauna, steam room and spa • 9 indoor tennis courts • 2 squash courts • Pool plant and store FIRST FLOOR • Aerobic studios • Gym • Function room EXTERNAL FACILITIES • Heated swimming pool • 4 external tennis courts ACCOMMODATION The property has been measured in accordance with the RICS Code of Measuring Practice (Sixth Edition) and has the following approximate gross internal floor areas: Accommodation Floor Area Sq M Area Sq Ft Ground Floor 2,142.33 23,060 Tennis, Squash and multi-purpose courts 3,963.49 42,663 First floor 1,341.42 14,439 Total 7,447.24 80,162 SITE TENANCY The site extends to an area of 6.57 acres (2.66 HA). The property is let on a joint tenancy to Virgin Active Health Clubs Limited (01395346) and Virgin Active Ltd (company no 3448441) on Full Repairing and Insuring Terms expiring 7 May 2031. The lease is subject to yearly reviews in line with RPI from 13th July TENURE 2017, subject to a collar of 1% and a cap of 4% per annum. The majority of the premises are held on Freehold basis with a small section on the A reversionary lease is in situ extending the term to 13 July 2036. The commencing rent North West corner being held on long leasehold interest. The leasehold interest expires under the reversionary lease is to be the passing rent under the current lease at the on 3 November 2124, with a current passing rent of £1.00 per annum. The lessee lease expiry. benefits from an option to purchase the area of land at any time at a cost of £1.00, plus acquisition costs. The property currently produces £237,660 per annum with a fixed review as at 13th July 2016 to £268,793 p.a. which equates to only £3.35 per sq ft. It is the vendor’s intention to top the rent up to this level on completion of the sale. COVENANT INFORMATION ENERGY PERFORMANCE Since it was founded 14 years ago, Virgin Active has grown to become one of the CERTIFICATE’S largest global health club companies and now has 1.5 million members in 272 clubs across the UK, Europe, South Africa and Australia. Energy Performance Certificate’s (EPC’s) for the property is 60, which provides a C group rating. Following the acquisition of Holmes Place’s UK business in 2006, and Esporta in 2012 there are now 118 Virgin Active clubs across the UK, making the company one of the country’s leading health and fitness providers. VAT For the year ending 31 December 2013, the joint covenant reported the following The property has been elected for VAT which will therefore be payable on the purchase financial figures:- price unless the sale can be treated as a Transfer of a Going Concern (TOGC). Virgin Active Health Clubs Limited (01395346) (Formerly Holmes Place Health Clubs Ltd) 31/12/2013 31/12/2012 31/12/2011 Sales Turnover £116,385,000 £120,240,000 £117,063,000 Profit/(Loss) before Taxes £143,285,000 (£3,089,000) £11,167,000 Net Assets £606,840,000 £569,455,000 £426,821,000 Virgin Active Limited (3448441) 31/12/2013 31/12/2012 31/12/2011 Sales Turnover £73,823,000 £73,120,000 £71,261,000 Profit/(Loss) before Taxes £1,048,000 (£8,515,000) £4,140,000 Net Assets £1,229,901,000 £887,156,000 £594,922,000 PROPOSAL Offers are sought in excess of £4,000,000 (Four Million Pounds), subject to contract and exclusive of VAT. A purchase at this level would reflect a yield profile, assuming GVA RPI forecasts and acquisition costs of 5.80%, of :- Acquisition 6.35 2017 6.59 2018 6.80 2019 7.01 2020 7.26 2021 7.53 2026 8.94 2031 10.64 Average yield over term 9.15 The proposed price also reflects a capital value per sq ft of £49.90, which is below replacement cost for the club. London West End Glasgow FURTHER 10 Stratton Street 206 St Vincent Street INFORMATION London W1J 8JR Glasgow G2 5SG London City Leeds 80 Cheapside City Point First Floor Should you wish to inspect the property London EC2V 6EE 29 King Street or require additional information, please Leeds LS1 2HL contact: Belfast Rose Building Third Floor Liverpool Philip Colman 16 Howard Street No.4 St Paul’s Square 020 7911 2353 Belfast BT1 6PA Old Hall Street [email protected] Liverpool L3 9SJ Birmingham Mark Frampton 3 Brindley Place Manchester 020 7911 2181 Birmingham B1 2JB Norfolk House [email protected] 7 Norfolk