Long Income Hotel Investment Opportunity. Travelodge, Goldington Road, Bedford MK41 0DS

Transcription

1 Long Income Hotel Investment Opportunity Travelodge, Goldington Road, Bedford MK41 0DS

2 INVESTMENT SUMMARY n Prominently located on Goldington Road in close proximity to Bedford town centre n Long established trading hotel providing 47 ensuite bedrooms n Hotel has a high average occupancy of 78% n Let to Travelodge Hotels Ltd for a further 21 years n 5 yearly upward only reviews to uncapped RPI n Current rent 85,000 per annum low rent of 1,808 per room n Vendor to top up the rent to the forecasted rent at the March 2016 rent review of 95,278 per annum - 2,027 per room n Offers sought in excess of 1,450,000 n Net initial yield 6.21%, assuming costs of purchase of 5.80% LOCATION Bedford is the commercial and administrative centre of the county of Bedfordshire. It is located 17 miles north east of Milton Keynes, 21 miles south east of Northampton and 30 miles west of Cambridge. The town benefits from excellent road communications with J13 of the M1 10 miles to the south west and the A1 nine miles to the east. The town has a population of 80,000 and Bedford University, located under a mile from the subject property, has over 24,000 students.

3 SITUATION The property is situated on a Goldington Road (A2480) two miles to the east of Bedford town centre. The property adjoins a Toby Carvery Pub and is immediately adjacent to a Greene King Pub (t/a Hungry Horse). It is also within close proximity to an established retail warehouse and leisure park on Riverfield Drive. Occupiers include Tesco, Wickes, Frankie & Bennys, Harvester, Homebase, Topps Tiles and Waitrose. Other nearby occupiers include Volvo, Land Rover, KIA and BMW car dealerships. Bedford University is located under a mile to the west of the subject property off Goldington Road. DESCRIPTION The property comprises a modern two storey hotel totalling 1,376 sq.m (14,810 sq.ft). The hotel has a main reception area and 47 ensuite bedrooms. Access to the hotel is off Goldington Road to the side of the Toby Carvery Pub and there is a shared car park of 87 spaces.

4 TENURE The property is held long leasehold for a term of 225 years from 10 March The ground rent is 10 per annum without review. The property benefits from all appropriate rights including access and car parking over the area outlined in blue on the site plan. TENANCY The property is let to Travelodge Hotels Ltd for a term of 25 years from 10 March 2011, expiring 9 March The current rent is 85,000 per annum ( 1,808 per room). The lease is held on full repairing and insuring terms subject to 5 yearly upward only reviews to uncapped RPI. The next review is on 10 March The Vendor will top up the rent to the forecasted rent at the March 2016 rent review of 95,278 per annum. The rent has been calculated based on published RPI growth with 1% growth up to the review date.

5 COVENANT Travelodge was the first budget hotel brand to launch in the UK in 1985 and now operates over 510 hotels (over 37,906 rooms). The company is one of the UK s largest, fastest growing and most highly recognisable budget hotel brands. More than 16.5 million people stayed with Travelodge last year and 90% of reservations are currently made through Travelodge.co.uk which is the UK s most visited hotel website. Since the start of the recession business customer stays have doubled. In 2013, Travelodge opened 14 hotels (1,742 rooms) at an investment of million. In 2014, a further 15 new hotels were opened as part of a further 100m investment including five in London cementing Travelodge s position as the largest hotel chain in the capital. Travelodge is also continuing its modernisation programme for its existing hotels and renovated a further 11,800 guest rooms during 2014 at a cost of 37m. Like for like revenue per available room grew by 17% in 2014 making Travelodge the fastest growing major UK hotel brand for like for like sales in The subject property has a high average occupancy rate of 78%. Travelodge Hotels Ltd is now owned by Goldentree Asset Management, Avenue Capital and Goldman Sachs following a transfer of ownership in October 2012 from its previous owners Dubai International Capital and a restructuring of the company s debt. A summary of the company s accounts is set out below. Travelodge Hotels Ltd (Company Number ) 31/12/ /12/ /03/2012 Turnover 426, , ,500 Pre-tax Profit (Loss) 37,300 (71,100) (26,900) Net Assets 684, , ,300 EPC The property has an EPC rating of C72. The report is available on request. VAT The property is elected for VAT and therefore VAT will be payable on the purchase price. It is anticipated that the sale will be dealt with as a TOGC. PROPOSAL We are instructed to seek offers in excess of 1,450,000 (One Million Four Hundred and Fifty Thousand Pounds) subject to contract and exclusive of VAT. A purchase at this level would reflect a net initial yield of 6.21%, assuming usual costs of purchase of 5.80%. CONTACTS For further information or if you wish to arrange a viewing, please contact :- BEN BLACKWALL ben.blackwall@fspproperty.co.uk Franck Steier Price Ltd ANDREW FRANCK-STEIER andrew.franck-steier@fspproperty.co.uk Third Floor, Victoria House Colmore Row, Birmingham, B3 3BD Misrepresentation Clause : The accuracy of any description, dimensions, references to condition, necessary permissions for use and occupation and other details contained herein are not guaranteed and are for general guidance only and prospective purchasers or tenants must not rely on them as statements of fact or representations and must satisfy themselves of their accuracy. Neither Franck-Steier Price Ltd, nor any of their employees or representatives has any authority to make or give any representation or warranty or enter into any contract whatever in relation to the property. Prices and rents quoted in these particulars may be subject to VAT in addition. The reference to any mechanical or electrical equipment or other facilities at the property shall not constitute a representation (unless otherwise stated) as to its state or condition or that it is capable of fulfilling its intended function. Prospective tenants/ purchasers should satisfy themselves as to the condition of such equipment for their requirements.