jenics CENTRALLY LOCATED Travelodge Bradford Central Valley Road Bradford BD1 4AF

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1 To jenics Let FREEHOLD INVESTMENT OPPORTUNITY CENTRALLY LOCATED Travelodge Bradford Central Valley Road Bradford BD1 4AF Purpose built 69 room Travelodge Hotel 25 year lease, 5 yearly uncapped reviews to RPIX Rental 227,700 pax

2 Location Situated on Valley Road approximately 0.5 miles from the centre of Bradford City, it is immediately opposite the Former Royal Mail centre (3.62 acres) which is currently under offer for redevelopment purposes. Bradford benefits from the provision of a strong branded budget mid scale hotel market, with the presence of Ibis (86), Premier Inn (118), Holiday Inn Express (118), Jurys (198) and Travelodge (68), all within the City Centre. All providing a total of 588 in which is a sustainable and moderately supplied hotel market. The British Land owned Forster Square Shopping Park is less than 500 yards from the hotel. This provides accommodation for McDonalds, Argos, Boots, Costa Coffee, Currys and Next, amongst many others, with 1300 car parking spaces. Bradford Forster Square train station is situated within 3 minutes walk of the hotel. Westfield Shopping Centre s, Broadway, Bradford, is 250 yards to the South. This is a proposal for a new development comprising 570,000 sq.ft. of retail and leisure accommodation in 70 units, with approximately half of the space now pre-let. Work is targeted to recommence later this year. The Leisure Exchange, which provides accommodation for Cineworld, Gala Casino, Holiday Inn Express, Hollywood Bowl, Premier Inn and restaurants including Frankie & Benny s, Nando s and The Real China, is 0.5 miles to the south. Valley Parade, home to Bradford City FC, is c0.6 miles from the hotel.

3 Description Bradford is approximately 8.5 miles West of Leeds. It forms part of the 4th largest Urban Area in the UK, with in excess of 1.5 million people. It benefits from its large population, strong economy and its thriving airport with a 3 million rolling year passenger numbers. Communications are excellent with access to the national motorway network via the M606, providing access to the main East West M62 and subsequently access to the M1 And M6. Rail communications are also excellent with Leeds 30 minutes, Manchester 1h 30 minutes and London Kings Cross 2h 50 mins. Bradford has a population of approx 295,000 people and is the 3rd largest of the West Yorkshire towns, after Leeds and Sheffield. It has a thriving economy, worth in excess of 8 billion, making it a powerhouse in the region with growth forecasts of up to 9 billion by It contributes c8.5% of the region s output and is the third largest region after Sheffield and Leeds in Yorkshire and Humberside. In addition to its strong economic base, it provides accommodation for some of the foremost financial service companies in the UK. Major employers include Freeman Crafton Holdings, Provident Financial, Ciba Chemicals, Damart, Gratton plc and Yorkshire Water. Bradford University is a large occupier and employer within the City Centre with over 13,000 students, 600 academic and 1200 admin staff. The Hotel 69 rooms over 4 floors. The hotel has the right to use 28 on site car parking spaces. Initial rental 227,700 exclusive of VAT. 25 year lease to Travelodge Hotels Limited commencing 19 March Vendor has benefitted from the reversionary lease option created by the CVA, to increase lease length back to 25 years. Rent reviews every 5 years to RPIX. There is a 3,000 sq.ft. vacant unit on the ground floor with planning for A1, A2, A3, A4 and A5 uses. The vendor will consider various options with regard to the ground floor commercial unit.

4 UK Hotel Market Summary 60% of the UK serviced accommodation sector is independent unbranded hotels. Branded hotels continue to grow whilst the independent sector contracts. Travelodge and Premier Inn operate nearly 65% of the branded budget sector. Travelodge, the 2nd largest operator, has less than 4.5% total market share. Average occupancy and RevPar within the budget and medium size hotel sector has increased from 2012 and in a recent announcement by STR Travelodge are currently out performing the rest of the budget and mid scale market in RevPar growth. The 57 million refurbishment of the Travelodge Estate, with cash injected from the CVA, has been accelerated with a further 20 million injected from the Company s owners and this refurbishment has shown an increase in RevPar growth in the second half of the year (YTD) of 8.8% and 8.8% in RevPar (4.7% + 2% up respectively in the rent of the midscale and economy classes (STR).

5 Travelodge Travelodge is the second largest branded budget hotel chain in the UK, operating from 470 hotels (some 34,678 rooms). It is the UK s best known brand with 95% prompted brand awareness (BDRC Survey 2010). It serves over 12 million customers annually and employs approximately 6,000 people. To October 2012, they sold 7.2 million rooms, an increase of 15.7% with total revenues of 324 million (up 10%). Corporate Structure Travelodge is owned by 3 of the Company s key investors, the US companies and global investment firms Golden Tree Asset Management, Avenue Capital and Goldman Sachs. As part of the recent restructure, the company s debt was substantially reduced with investors writing off part of their loans and restructuring the payment on the remaining debt to 2017/18. Cash pay interest has been substantially reduced. There was an initial 75 million injection of new money, part of which allowed funding for a major 55 million ongoing refurbishment programme over the existing estate, and a further 20 million has subsequently been injected to expedite the refurbishment. Under the terms of the re-finance, Travelodge s bank debt dropped from million to 331 million, reducing the gearing ratio from 30.4 x s to around 9x s. The ratio is forecast to fall to around 4 x s at the end of As a condition of the restructure, Travelodge were required to implement a Company Voluntary Arrangement (CVA) resulting in the leases for 46 value dilutive hotels being terminated and rent being reduced by 25% on a further 109 hotels. The CVA proposal was overwhelmingly voted through by creditors in September Of the 46 hotels released, a number have been reoccupied on Management Agreements and space to trade under the Travelodge brand. This debt restructure significantly improves Travelodge s balance sheet and provides a sustainable long term future. Actual occupancy and RevPar achieved throughout he company during 2011 was 73%, with an average room rate of and RevPar of

6 Price We are seeking offers in excess of 3.3 million (three million three hundred pounds). A purchase at this level will reflect a net initial yield of 6. 5 %, subject to contract and exclusive of VAT, based upon purchaser s cost of 5.8%. This figure does not account for any income from the ground floor. This accommodation can be included within the sale if required. Energy Performance Certificate Legal Costs Each party is to be responsible for their own legal costs incurred in this transaction. VAT Prices, outgoings and rentals are exclusive of but may be liable to VAT. Plans Can be provided upon request for identification purposes only. Viewing Strictly by appointment through the agent: Neil Bowler nb@jenics.com Subject to Contract December 2013 Misrepresentation Act: The agent, for themselves and for the vendors or lessors of this property for whom they act, give notice, that; (i) these particulars are a general outline only, for the guidance of prospective purchasers or tenants, and do not constitute the whole or any part of any offer or contract; (ii) the agent cannot guarantee the accuracy of any description, dimensions, references to condition, necessary pemission for use and occupation and any other details contained herein and prospective purchasers or tenants must not rely on them as statement of fact or representation and must satisfy themselves as to their accuracy; (iii) no employee of the agent has any authority to make any representation or warranty or enter into any contract in relation to the property; (iv) prices/rents quoted in these particulars may be subject to VAT; (v) the agent will not be liable, in negligence or otherwise, for any loss arising from use of these particulars. Any photographs and plans attached to these particulars were correct at the time of production and are for reference, rather than fact. Designed and produced by BDM,