WELL SECURED PRIME VIRTUAL FREEHOLD LEISURE INVESTMENT OPPORTUNITY Slug and Lettuce and Revolucion De Cuba, 1-2 The Friary, Cardiff, CF10 3AJ
INVESTMENT SUMMARY Prominent Cardiff City Centre Leisure Location 2 Well Let leisure unit s arranged over Ground Floor totalling 14,864 sq ft (1,380.91 sq m) Long Virtual Freehold for a term of 999 years from 29th June 2001 Let to the strong Slug and Lettuce Company Ltd and Revolucion De Cuba Ltd covenants. The former is owned by and the latter is being acquired by the well established Stonegate Pub Company Group AWULT of 16.18 years Net income of 269,000 per annum Offers are sought in excess of 4,200,000 (Four Million Two Hundred Thousand Pounds) subject to contract and exclusive of VAT A purchase at this level reflects a Net Initial Yield of 6.00% after allowing for purchaser s costs of 6.55%
LOCATION Cardiff is the capital city and administrative centre of Wales. It is also the principal commercial centre for the South Wales region. The City is in the top 5 retail centres in the UK and attracts 12 million tourists per annum. Cardiff is located approximately 45 miles (72 km) west of Bristol, 42 miles (67.5 km) east of Swansea and 155 miles (249 km) west of London. The City benefits from excellent road communications and lies 4miles (7 km) south of the M4 motorway, providing direct access to London to the east and much of South Wales to the west. Cardiff is well served by the rail network with direct and frequent services to London Paddington with a fastest journey time of approximately 2 hours. Additionally, a local rail service operates serving the Valleys (Caerphilly, Cwmbran, Pontypridd, Ebbw Vale and Merthyr Tydfil). The mainline railway is one of the busiest in the UK and has over 11.5 million passengers every year. The City benefits from international communications with Cardiff International Airport providing regular scheduled flights to Amsterdam, Belfast, Dublin, Edinburgh, Geneva, Paris and Prague. Cardiff International Airport lies approximately 14 miles (22.5km) to the south west of the city centre. The airport has seen tremendous growth with annual passengers in the region of 1.5 million a 19% increase on previous years, in June 2017 it dealt with 185,000 passengers that month alone. Qatar airways have also confirmed a new route from Cardiff in 2018. Tourism Cardiff has a thriving tourism trade with the three year annual average between 2012-2014 at 1.1million overnight trips. For domestic day visits, from the period 2011-2014, Cardiff received 17.4 million visits. The Principality Stadium The Principality Stadium (previously known as Millennium Stadium) is located within a 5 minute walk of Revolution Bar. The stadium has a capacity of 72,500 and since opening the asset in June 1999, the Stadium has welcomed an average of 1.3 million visitors per year for sports and music events. The Stadium is also one of Cardiff s best equipped conference venues. It recently held the champions league football final between Real Madrid and Juventus. Students The University sector is worth in excess of 800m to the local economy with students comprising over a fifth of the primary catchment. Cardiff s universities achieve one of the best graduate employability rates in the UK. The city s universities are home to 75,000 students, with over 110,000 students in South Wales in total. Leisure spending in the city is also bolstered by the higher than average proportion of 18-24 year olds in the primary catchment. Catchment and Demographics Cardiff serves an extensive catchment area with over 1.5 million people. The City has an estimated catchment population of 913,000 people equating to nearly one third of the Welsh population. The magnitude of the catchment is demonstrative of both the strength of Cardiff s leisure offer and the lack of any significant competing centres. Cardiff is projected to grow by a further 26% over the next 20 years, one of the fastest growing of the UK Cities. Over a quarter of the city s primary population is considered as Affluent Achiever.
Cardiff Leisure Cardiff s leisure market is a combination of trade from the large catchment population, the resident student population and the international visitors to the city s tourism offering. The major tourist attractions include, The Principality Stadium, Cardiff Castle, Cardiff Bay, St David s 2 Shopping Centre, Sophia Gardens International Cricket Ground and the Cardiff City and Cardiff Blues Stadium. Cardiff has a lively festival and events calendar and is one of the leading cultural cities in Europe. The leisure circuit is located within the central core of the city centre. St Mary Street, Brewery Quarter and Mill Lane are considered to be the drinking related pitch with Greyfriars Road and the area around the Castle including High Street, Castle Street and Womanby Street are considered to be the more professional offering. St Mary Street, Brewery Quarter & Mill Lane St Mary Street has become the centre of Cardiff s nightlife with over 40 pubs and bars in and around St Mary Street and Castle Street. Occupiers include Walkabout, Dirty Martini and Be At One. Mill Lane connects St Mary Street to The Hayes and occupiers include Las Iguanas, Cote, Wagamama and Carluccios as well as various other locally operated bars and restaurants. The Brewery Quarter is located in the former Brains Brewery which was developed in 2003. Occupiers now include Bella Italia, Nandos, Five Guys, Pierre Le Bistrot and Starbucks. St David s Centre Occupiers include Pizza Express, Gourmet Burger Kitchen, Shake Shack, Wahaca (their first store outside of London) and Jamie s Italian. Cineworld Cardiff is a 15 screen cinema located adjacent to St David s Centre. Cardiff Bay Cardiff Bay is a vibrant area which offers an alternative social venue to the city centre. Restaurant and bars at Cardiff Bay include Zizzis, Wagamama, Carluccios and Cote.
t K I N G S WAY SITUATION The property is situated on the ground floor of the prominent Capital Tower office building, the tallest building in Cardiff. It is on the corner of Greyfriars Road and The Friary directly opposite the Hilton Hotel and No 1 Kingsway office building. The Friary sits just off Queen Street the prime retail pitch for Cardiff. Nearby prominent buildings include Cardiff Castle, The Principality Stadium, Park Plaza Hotel also on Greyfriars Road and Cardiff University and the Civic Centre. The streetscape has all been improved in recent years with a tree lined avenue. Other occupiers in the area include the New Theatre, a Travelodge hotel also on The Friary and and Tiger Tiger. K TA L B O T S T o an S O P H I A C L O S E H A M I LT O N S T C O W B R I D G E R D E A S T R AW D E N M E W S N E V I L L E S T D E B U R G H S T M A C H E N P L A C E C R A D D O C K S T WELSH INSTITUTE OF SPORT C AT H E D R A L R D A 4 1 1 9 R AW D E N P L N E V I L L E P L C L A R E G D N S G L O U C E S T E R S T L O W E R C AT H E D R A L R D A 4 1 1 9 SOPHIA GARDENS C L A R E S T C L A R E P L A4161 G R E E N S T M A R K S T B R O O K S T RIVERSIDE D E S P E N S E R S T B E A U C H A M P S T C O L D S T R E A M T C E D E S P E N S E R P L A C E P L A N TA G E N E T S T T U D O R S T T U D O R L A N E COOPERS FIELD F I T Z H A M O N E M B A N K M E N T F I T Z H A M O N L A N E R I V E R TA F F P E N D Y R I S S T C A S T L E S T R E E T M I L L E N N I U M WA L K WAY WELSH COLLEGE OF MUSIC & DRAMA A 4 1 6 1 T O A 4 8 A N D M 4 W E S T BUTE PARK W E S T G AT E S T R E E T C ARDIFF R U GBY C LUB R I V E R TA F F N O R T H R O A D W O M A N B Y S T S C O T T R D C A S T L E I AV E N U E C I T Y H A L L R D A 4 7 0 ( A 4 6 9 ) T O C A E R P H I L LY & M 4 M I L L E N N I U M P L A Z A A R C A D E Q U AY S T P A R K S T R E E T LAW COURTS CARDIFF CASTLE D U K E S T R E E T H I G H S T R E E T W E S T G AT E S T R E E T BT TOWER H AV E L O C K S T A 4 1 6 1 H I G H S T A R C A D E G U I L D H A L L P L C H U R C H S T CITY HALL Hilton Hotel K I N G S WAY B O U L E VA R D D E N A N T E S CENTRAL SQUARE DEVELOPMENT BBC CENTRAL TRAIN STATION S.A.BRAIN & CO LTD BREWERY S T J O H N S T R E E T S T M A R Y S T R E E T M AV E N U E G O R S E D D G A R D E N S R D No 1 Kingsway T H E F R I A R Y T R I N I T Y S T R E E T G R E AT W E S T E R N L A N E A 4 7 0 S T U T T G A R T E R Park Plaza Hotel G R E Y F R I A R S R O A D S T M A R Y S T R E E T Capital Tower Q U E E N S T R E E T W H A R T O N S T R E E T S A U N D E R S R O A D QUEEN'S ARCADE W O R K I N G S T M O R G A N A R C A D E R O YA L A R C A D E F R E D E R I C K S T T H E H AY E S C A R O L I N E S T R E E T P E N A R T H R O A D A 4 1 6 0 T R E S I L L I A N WAY M I L L L A N E P A R K P L A C E A N E S T A N D R E W S P L A C E New Theatre P A R K P L A C E ST DAVID'S CENTRE S T D AV I D ' S H A L H I L L S S T R E E T H AY E S B R I D G E R O A D M A R R I O T T S T R A S S E C U S T O M H O U S E S T P A R K L A N E B U T E S T R E E T C R I C H T O N S T R E E T C R I C H T O N S T R E E T S T A N D R E W S L A N E D U M F R I E S L N W I N D S O R P L W I N D S O R L A N E Q U E E N S T R E E T C H A R L E S S T R E E T B A R R A C K L A N E T R E D E G A R S T W E S L E Y L A N E ADMIRAL HQ M A R Y A N N E S T B U T E T E R R A C E D U M F R I E S P L A C E N O R T H E D WA R D S T C H U R C H I L L WAY B R I D G E S T D AV I D S T MOTORPOINT ARENA H E R B E R T S T L L O Y D G E O R G E AV E - A 4 7 0 S TAT I O N T E R R A C E G U I L D F O R D S T C H U R C H I L L WAY QUEEN STREET G U I L D F O R D C R W E S T G R O V E F I T Z A L A N R D UNIVERSITY OF SOUTH WALES A D A M S T C A P I TA L Q U A R T E R T H E WA L K S A N D O N S T T H E P A R A D E A 4 1 6 1 T O N E W P O R T A 4 8 & M 4 N E W P O R T R D A 4 1 6 1 E L L E N S T S C H O O N E R WAY T Y N D A L L S T F I T Z A L A N P L A C E K N O X R D B R I G A N T I N E P L L L A N S A N N O R D R E A S T G R O V E C E N T R A L L I N K A 4 2 3 4 W H A R F R D E H O WA R D P L 6 1 C I T Y R D A D A M S T O W N F I T Z A L A N P L A C E W I N D S O R R D D AV I S S T M O I R A T E R R A C E A 4 2 3 4 T O C A R D I F F B AY & M 4 1-2 The Friary, Cardiff, CF10 3AJ G L O S S O P R D N E W P O R T R O A D L A N E M O I R A P L A C E T Y N D A L L S T DESCRIPTION The property comprises of two modern well configured ground floor leisure units with excellent full height glazed frontages. Both are directly opposite the Hilton Hotel. Unit 1 let to Slug and Lettuce Ltd benefits from a prominent return frontage as well as a demised external seating area on Greyfriars Road and the Friary. Unit 2 let to Revolucion De Cuba has a glazed frontage along The Friary as well as a demised external seating area.
COVENANT Stonegate Pub Company Ltd is currently acquiring Revolution Bars Group which operates over 60 bars for in excess of 100 million which represented a share price of 203p a share. They are the largest privately held manage pub operator in the UK. It trades from over 690 locations through a variety of formats including Slug & Lettuce, Walkabout, Scream and Missoula. Stonegate is owned by TDR Capital who currently manage over 5 billion of funds. 25TH SEPTEMBER 2016 27TH SEPTEMBER 2015 The Revolution Bars Group is a leading operator of premium bars with a strong presence across the UK. They have a trading portfolio of over 60 outlets and are expanding further. The groups Revolution Bars has been trading since 1996. The groups second brand Revolucion De Cuba was established in June 2011. Revolution Bars Group floated on the London Stock Exchange in 2015. Revolucion De Cuba most recent published results are highlighted below: Revenue 642,561,000 561,632,000 Operating Profit 18,527,000 31,068,000 30/06/2015 30/06/2014 Sales Turnover (000 s) 14,529 5,109 Cash 28,886,000 12,981,000 Profit / (loss) Before Tax (000 s) 1,102 872 Total Assets 691,850,000 609,718,000 Tangible Net Worth (000 s) 1,805 899 Total equity 81,122,000 99,741,000 TDR Capital established Stonegate Pub Company in 2010 to acquire 333 pubs from Mitchells & Butlers Plc. Since then, the size of Stonegate s estate has more than doubled through a series of acquisitions including Town & City Pub Company in 2011, selected assets from Living Room and Bramwell Pub Company in 2013, Maclay Inns in 2015, and most recently Tattershall Castle Group, Intertain (Walkabout Bars) and selected assets from J.D. Wetherspoons in 2016. Today, Stonegate is the fourth largest managed pub company in the United Kingdom. For further information please visit www.stonegatepubs.com Slug and Lettuce Company Ltd have a Dun and Bradstreet rating of 4A1 and a minimum risk of business failure. There is a guarantee from Inventive Guarantee Co Ltd. The operational company (Inventive Leisure Services Ltd) reported a Turnover of 29.60m for the year ending 30/06/15. Revolution Bars Group Plc has a Dun and Bradstreet rating of 5A1 and are classified as having a minimum risk of business failure. They had a turnover of just under 120 million and an increase on the previous year of 6.90%. The venue is well established. The format is perceived as a more upmarket night-time offering and has been successful in capturing the professional, student and weekend trade. Latest accounts show a turnover of in excess of 61 million and a net worth if in excess of 30 million. They are one of the most well know brands in the leisure industry.
TENURE The property is held long virtual freehold for a term of 999 years from Topland Mercury Ltd from 29th June 2001 at a peppercorn rent. TENANCY The property is let in accordance with the tenancy schedule below: UNIT TENANT LEASE TERMS TERM CERTAIN YRS % OF INCOME FLOOR AREAS (SQ FT APPROX) RENT PER SQ FT RENT PER ANNUM COMMENTS Unit 1, The Friary Slug and Lettuce Company Ltd (Stonegate Pub Company Ltd) 35 years from 25/06/1999 16.83 50% 6,860 19.61 134,500 IRI lease Unit 2, The Friary Revolucion De Cuba (Inventive Leisure Ltd) 35 years from 26/03/1998 15.58 50% 8,004 16.80 134,500 IRI lease. Tenant break 25/03/2023 (5.58 years) on minimum of 6 months notice The Revolution Group is currently being acquired by Stonegate Pub Company Ltd TOTAL 16.18 100% 14,864 18.10 269,000 BREAK 10.96 There is a current Service charge budget of 0.70p per sq ft. A full budget is available on request. INVESTMENT COMPARABLES DATE ADDRESS TENANT SIZE PRICE NIY COMMENTS Q3 2017 26-28 St Nicholas Street, Bristol Stonegate Pub Company Ltd 16,543 2.425m 5.05% 16 years unexpired Q1 2017 15-21 Clarence Street, Cheltenham J D Wetherspoons 14,583 3.075m 3.90% Outstanding Jan 16 rent review. 19 years unexpired. Q4 2016 The U Shed, Cannons Road, Bristol Punch taverns and Black Sheep Bars Ltd 31,771 7.70m 6.84% 7 years unexpired. Q4 2016 51 Park Street, Bristol Azzuri 3,717 0.77m 5.80% Sub-let to Myristica Resturant. 5.5 years unexpired. Q4 2016 Pub Porfolio Stonegate Pub Co., Punch, and Spirit Pub Co. 6 pubs 17.80m 4.75% The portfolio comprises 6 pubs located in Putney, Islington, Birmingham, Croydon, Buckinghamshire and Harpenden. WAULT of 25 years +. Q2 2016 10 St Johns Street, Cardiff Stongate Pub Co Ltd. 13,455 2.125m 5.32% Fixed annual reviews at 2.5%. 24.5 years unexpired. Q1 2016 Becketts Bank, 28-30 Park Row, Leeds J D Wetherspoons 9,992 2.852m 5.47% Fixed rental increase in June 2020. 24 years unexpired.
VAT The property is elected for VAT and as such we anticipate the transaction can be treated as a TOGC (Transfer of a Going Concern). EPC EPC available on request. PROPOSAL We are instructed by our client to seek offers in excess of 4,200,000 (Four Million Two hundred thousand Pounds), subject to contract and exclusive of VAT for the virtual freehold interest in the property. A purchase at this level provides a purchaser with an attractive net initial yield of 6.00% after deducting purchasers costs of 6.55%. FURTHER INFORMATION For further information, and arrangements to inspect the premises are to be made through the agents: Ross Griffin Director Savills Commercial 12 Windsor Place Cardiff Tel: 02920 368961 Email: rgriffin@savills.com SUBJECT TO CONTRACT Misrepresentation Act 1. Messrs Savills UK Ltd for themselves and for the vendors or lessors of this property whose agents they are, give notice that: 2. The particulars are set out as a general outline only for the guidance of intending purchasers or lessees and do not constitute, nor constitute part of, an offer or contract. 3. All descriptions, references to condition and necessary permission for use and occupation and other details are given in good faith and are believed to be correct but any intending purchasers should not rely on them as either statements or representation of fact but must satisfy themselves by inspection or otherwise as to the correctness of each of them. All dimensions are approximate. 4. No persons in the employment of Messrs Savills (UK) Ltd has any authority to make or give any representation or warranty whatsoever in relation to this property. 5. All correspondence regarding this offer is subject to contract. Design by Martin Hopkins Tel: 029 2046 1233 martinhopkins.co.uk September 2017