PRIME CARDIFF CITY CENTRE RETAIL AND LEISURE INVESTMENT OPPORTUNITY CARDIFF CF10 1AH

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1 THE HAYES

2 Investment Summary Cardiff is the capital city of Wales and has a catchment population of 1.6 million within a 45 minute drive. 20 million visitors to the city annually, spending circa 1.1bn per annum. Prime location directly adjacent to St. David s Hall and St. David s Shopping Centre, which attracts 40 million visitors per annum. 70% of income from national operator Mitchells & Butler t/a Miller & Carter let until 2039 (break in 2029). Freehold. Excellent asset management opportunities to let vacant basement and introduce new tenant at first floor. Current rent of 505,000 per annum on ground and first floor accommodation. We have been instructed to seek offers in excess of 8,250,000, subject to contract and exclusive of VAT reflecting a NIY of 5.69% assuming standard purchasers costs of 7.54%. Cardiff is expected to grow faster than any other UK city in population terms 2

3 A470 Brecon A479 A465 Tewkesbury A49 A48 A483 Ammanford A470 A465 Abergavenny Gloucester A Llanelli M4 SWANSEA Port Talbot Neath A465 Merthyr Tyd l Aberdare Pontypool Pontypridd Caerphilly A Cwmbran Newport A449 Chepstow M48 M4 A48 M5 Stroud A433 A429 Porthcawl Location Bridgend M4 Barry CARDIFF Weston-super-Mare Clevedon M5 A38 BRISTOL M32 BRISTOL A37 A4 M4 Bath A46 A36 Trowbridge Cardiff is the capital city of Wales and provides the principal retailing and commercial centre for the South Wales region. The city is located immediately to the south of the M4 motorway, approximately 44 miles west of Bristol and 42 miles east of Swansea. Cardiff benefits from good access to the national rail network. Cardiff Central railway station provides regular direct trains to London Paddington (1 hour 59 minutes), and Birmingham New Street (2 hours). Cardiff Airport is located 11 miles south west of the City Centre and provides scheduled flights to an ever expanding array of global destinations. Chippenham Melksham 61 A350 Situation The subject property occupies the prime position in the heart of Cardiff s city centre retail and restaurant offer. The property benefits from return frontage onto The Hayes and Hill Street, directly adjacent to one of the principal entrances to St David s Shopping Centre. This development transformed the Welsh Capital into one of the UK s top retail destinations with an additional 1.4 million sq ft of retail space, Total footfall for St David s Shopping Centre is approximately 40 million visitors per annum. The subject property is situated on what is regarded as the prime leisure and restaurant pitch in Cardiff, namely The Hayes, Morgan Arcade and Mill Lane. Nearby occupiers include retailers John Lewis, House of Fraser, TK Maxx, Hugo Boss, All Saints, Fred Perry, Joules, Urban Outfitters and restaurants including Wahaca, Bills, Carluccios, Wagamama and Gourmet Burger Kitchen. The Ivy is also opening its new restaurant opposite. The property is also adjacent to St. David s Hall, a 2,000-seat concert hall which is home to the annual Welsh Proms Cardiff, the Orchestral Concert Series featuring the world s top orchestras, the bi-annual BBC Cardiff Singer of the World competition and a multitude of other live entertainment, comedy shows, regular exhibitions and company conferences. 3

4 Demographics Cardiff is expected to grow it s population by 26% over the next 20 years, faster than any other city in the UK. Cardiff benefits from a significant primary retail catchment of 1,600,000. Cardiff draws its catchment from a large area and retains a significant share of the available spend due to the lack of competition within the catchment. 373,790 people live within a 20 minute drive of Cardiff City Centre, rising to 2,363,431 within 1 hour. The catchment has a relatively young and affluent population with 27% of the population aged between (UK average of 19.9%) whilst 56% of the population is social grade ABC 1 (UK average of 53.2%). The city has a significant student population of approximately 50,000 at three universities: Cardiff University, Cardiff Metropolitan University and University of South Wales. 20 million visitors to the city annually, spending circa 1.1bn per annum. Tourist attractions include: Cardiff Castle, the Principality Stadium and the Wales Millennium Centre. Cardiff is rapidly becoming a hub for global sporting events after successfully hosting the UEFA Champions League 2017 Final which brought 314,264 visitors to the city in a single day, boosting the local economy by 45m. The city is also set to host the Volvo Oceanic Race in 2018, with Cardiff being the only UK stop of the 46,000 mile global race. In addition, Cardiff also boasts a number of other sporting events. concerts, exhibitions etc at the Principality Stadium, Swalec Stadium, Cardiff City Stadium, Cardiff Arm s Park, the Motopoint Arena and the Ice Arena Wales which all bring numerous visitors and spend to the city centre. 40 million annual footfall to St Davids Shopping Centre 50,000+ student population Cardiff is the capital city of Wales and has a catchment population of approximately 2.4 million within 1 hour 4

5 FITZHAMON EMBANKMENT TUDOR ST CASTLE ST WESTGATE ST PRINCIPALITY STADIUM RIVER TAFF SCOTT RD VUE CINEMA WOOD ST CASTLE ST HIGH ST WESTGATE ST PARK ST PARK ST ST MARY ST WESTGATE ST WOOD ST CENTRAL SQUARE CARDIFF CENTRAL WHARTON ST QUEEN STREET THE HAYES ST MARY STREET QUEEN ST THE ARCADES QUEENS ARCADES THE HAYES BREWERY QUARTER MILL LANE ST MARY ST A1 Retail Provision A3 Provision Core Office Locations 9-11 THE HAYES HILLS ST ST DAVID S CENTRE TREDEGAR ST JOHN LEWIS BUTE ST CHARLES ST CHURCHILL WAY BRIDGE ST CINEWORLD BUTE TERRACE Cardiff Investment Cardiff has experienced significant investment over recent years, which continues as the council plans to spend 700m on city infrastructure in the next five years. The BBC will be developing a 150,000 sq. ft office complex in Cardiff City Centre which will be completed in 2018 and bring 1,200 staff members into the city centre. In a similar fashion, the UK Government has pre-let 266,000 sq. ft of new office space at No.6 Central Square and is set to relocate a further 4,000 jobs to the city centre as of 2019 (see adjacent map). Other notable developments include plans to construct a new 15,000-seater indoor arena in Cardiff, costing 100m. This will further enhance the city s current strong retail and leisure offer in the city centre and attract more high spending visitors. The confidence exuberating from Cardiff has resulted in a number of new entrants entering the food & beverage and leisure sectors such as Marco Pierre White s Steakhouse, Brewhouse and Kitchen, a new JD Gym costing 2m with The Ivy opening soon and The Alchemist investing 1.6m in converting a former bank. All of these will be each company s first establishment in Wales. Location Occupier Headline Rent (psf ) St David s Centre & Mill Lane The Brewery Quarter & Mill Lane Zizzi Wahaca Shake Shack Jamie s Italian Ask Italian Five Guys Wagamama

6 Description The property comprises an attractive Grade II Listed building on a prominent corner site that sits adjacent to one of the primary entrances to St David s 2 Shopping Centre in the heart of Cardiff city centre s retail and restaurant offer. The property is of steel frame with stonework elevations under flat and pitched tiled roofs. The accommodation is laid out over basement, ground/mezzanine, first and second floors comprising approximately 29,599 sq. ft in total. Internally, the first floor offers an attractive, well-let, predominantly open plan unit with high ceilings. The basement benefits from a dedicated entrance directly off The Hayes, leading to an open plan unit with good floor to ceiling height. The property has goods lift access to all floors, a DDA compliant lift providing access to the basement and a passenger lift to the first floor. Accommodation The building provides the following approximate Gross Internal Area (GIA): Floor Sq Ft Sq M Basement 8, Ground and floor mezzanine 10, First and Second Floor 11,274 1, TOTAL 29,599 2,

7 THE HAYES t San wi e s D vid Da t S 7

8 Basement Bar Miller & Carter First Floor Tenure Freehold. 70% of income from national operator of Mitchells & Butler t/a Miller & Carter Tenancy Unit Tenant Area sq ft Lease Start Lease Expiry Unexpired Term (break) Break Rent p.a Rent psf. Comment Basement Vacant 8, Available to let. Not subject to empty rates. Ground floor and mezzanine restaurant First floor restaurant Mitchells & Butler Retail (No.2) Ltd t/a Miller & Carter Burger & Lobster Restaurant Group Ltd. 10,293 22/04/ /04/ /04/ , The rent is subject to 5 yearly five yearly upwards only, open market, rent reviews capped at 4% p.a compounded. 11,274 15/09/ /09/ /09/ , The rent is subject to 5 yearly upwards only reviews, linked to a multiple of , On this basis the rent will be reviewed to 182,497 in September Burger & Lobster are currently not in occupation. TOTAL 29, ,000 8

9 Asset Management There are numerous opportunities to add value to the asset, including: Let the vacant basement unit to a restaurant operator or alternative leisure operator such as a gym or indoor golf/darts/table tennis operator (subject to planning/licences). Initial interest has already been received from genuine leisure operators such as Escape Rooms. Burger & Lobster are currently not in occupation of their unit. Whilst still receiving income from Burger & Lobster, there is therefore an opportunity to secure an alternative restaurant or bar operator currently without a presence in Cardiff. Covenant Analysis Miller & Carter Steakhouse forms part of the Mitchells & Butlers Plc. Mitchells & Butler runs circa 1,784 managed pubs, bars and restaurants throughout the United Kingdom. Brands include Miller & Carter, Harvester, Toby Carvery, Nicholson s, O Neill s, All Bar One and Browns. In 2017, Mitchells & Butlers Plc reported a Turnover of 2.18 billion generating a Profit before taxation of 77 million and Shareholders Funds of 1.6 billion. Mitchells & Butlers Retail (No. 2) Ltd has a Fame Credit score of Secure (89). Burger & Lobster was founded in 2011 and operates 18 restaurants worldwide, in location such as, New York, Dubai, Bangkok, Malaysia and 11 restaurants in the United Kingdom. Burger & Lobster Restaurant Group Limited has a Fame Credit score of Secure (81). 9

10 VAT We understand the property is elected for VAT. It is anticipated the sale will be treated as a Transfer of Going Concern (TOGC). Proposal We are instructed to seek offers in excess of 8,250,000 subject to contract and exclusive of VAT. A purchase at this level would reflect a NIY of 5.69% (assuming standard purchaser s costs of 7.54% reflecting the effective Stamp Duty change in Wales from April 2018) Total income currently received in 505,000 p.a, which includes 355,000 p.a from Miller & Carter and 150,000 p.a from Burger & Lobster. There is no income applied to the basement unit. Contact Information For further information or to arrange an inspection please contact: ANDREW MCGREGOR T: M: E: andrew.mcgregor@knightfrank.com GARETH LLOYD T: M: E: gareth.lloyd@knightfrank.com DANIEL SERFONTEIN T: M: E: daniel.serfontein@knightfrank.com 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 OC Our registered office is 55BakerStreet, London W1U8AN, where you may look at a list of members names. March Designed and produced by Creativeworld. Tel: