SUNNISIDE LEISURE SUNDERLAND

SUNNISIDE
LEISURE
SUNDERLAND
MODERN MULTI-LET LEISURE INVESTMENT
WELL LET WITH 90% OF
INCOME SECURED TO STRONG
COVENANTS WITH MINIMUM
RISK OF FAILURE
64% OF INCOME WITH FIXED UPLIFTS
INVESTMENT
SUMMARY
■■
Modern multi-let leisure investment situated in the heart
of Sunderland City Centre in close proximity to the newly
refurbished Bridges Shopping Centre
■■
National operators Empire Cinemas (guaranteed by
Cine-UK), Grosvenor Casinos, Frankie & Benny’s
and Nando’s
■■
Let to 7 tenants and currently producing £988,624
per annum
■■
Low average passing rent of £11.95 psf
■■
12 screen cinema with in excess of 550,000 admissions
per annum
■■
Well let with 90% of income secured to strong covenants
with minimum risk of failure
■■
AWULT of 16.1 years to expiry and 14.4 years to breaks
■■
64% of income has fixed uplifts
■■
Free 650 space car park
■■
Asset management opportunities with existing tenancies
■■
Low Capital Value of just £141 psf
■■
Part listed façade meaning nil rates liability on voids
under current legislation
WE ARE SEEKING OFFERS IN EXCESS OF
£12,900,000 (TWELVE MILLION NINE
HUNDRED THOUSAND POUNDS)
WHICH PRODUCES THE FOLLOWING
YIELD PROFILE:
NIY: 7.25%
RUNNING YIELD SEPTEMBER 2014: 7.75%
RUNNING YIELD AUGUST 2016: 7.87%
WHITLEY BAY
NEWCASTLE
INTERNATIONAL
A19
A1
A696
A1058
A69
DO
R
ST
VAUX BREWERY SITE
Y’
AR
WASHINGTON
NR
OA
D
H
A183
ST E
BO R O U G H
HOLMESIDE
AD
R RO
BUR N PARK R OA D
T UN
MR
DUR
OA D
HA
NR
OA
D
O
K
PA R
R OA D
CATCHMENT &
DEMOGRAPHICS
372,000 830,734
THE TOTAL POPULATION WITHIN
THE SUNDERLAND PROMIS
PRIMARY CATCHMENT AREA
MOWBRAY
PARK
AD
KTO
LL R
STA
AD
A690
RO
ROAD
TOWARD
CHE
CITY
CENTRE
C
ST O
The property is located
approximately 250 metres from
Sunderland train station which
UNIVERSITY
OF SUNDERLAND
TRAVELODGE
AY
HAELS W
Sunderland benefits from good
road communications, being
close to the A1(M) and A19
which provide direct links into
Newcastle Upon Tyne to the north
and Darlington to the south. The
city has a primary catchment
population of approximately
372,000 and a catchment of
830,734 within 10 miles of the
city centre.
provides regular rail services to
Newcastle, Manchester, Leeds,
Birmingham and Edinburgh.
Journey time to London Kings
Cross is approximately 3 hours
20 minutes. In addition, Sunderland
benefits from the Tyne and Wear
Metro light rail system, with 60
stations connecting passengers
to the heart of both Newcastle
and Sunderland city centres,
Gateshead, North and South
Tyneside and Newcastle Airport.
The Metro has been rated as one
of the country’s most efficient
modes of transport and currently
carries nearly 40 million passenger
journeys per year. Nexus is
currently investing £385 million in
upgrading the system.
T R EET
MA S S
TEN PIN BOWLING
BRIDGES SHOPPING CENTRE
C
ST. M I
PREMIER INN
LOCATION
Sunderland is a major
conurbation in the north-east of
England, situated approximately
14 miles south of Newcastle,
11 miles south of Gateshead,
9 miles east of Washington and
38 miles north of Middlesbrough.
O
ST. T H
D ST R E ET
O
H Y LT
IN
A19
TRAVELODGE
ET W
H I G H ST R E
RA I LW
A Y RO
W
A690
A183
ET
TRE
K S
FOL
A1(M)
A1018
Y
WA
R
NO
63
CHESTERLE-STREET
S
SUNNISIDE
LEISURE
M
ST.
64
A693
ST MARY’S
CARPARK
K
AN
SB
PA N N
R E ET
T
S
EAR
W. W
E
A1231
SUNDERLAND
A1231
RIVER WEAR
EE T
SUNNISIDE
LEISURE
A194(M)
A694
N
A1018
UT H BRI DG
IM
W EA RMO
TR
ON R OW
GATESHEAD
E
E ASINGTON STREET
T
I N GD
A194
A1
BE
NORTH
SEA
EE
R
FA R
SOUTH SHIELDS
HEBBURN
NEWCASTLE-UPON-TYNE
ST R
CH
BUR DON ROAD
PONTELAND
APPROXIMATE POPULATION
WITHIN 10 MILES OF THE
CITY CENTRE
THE AGE PROFILE OF THE SUNDERLAND
PRIMARY CATCHMENT POPULATION
INCLUDES A RELATIVELY HIGH PROPORTION
OF THE RETIRED AGED 65 AND OVER; YOUNG
ADULTS AGED 15-24 ARE ALSO OVERREPRESENTED.
SUNDERLAND
UNIVERSITY
BRIDGES
SHOPPING
CENTRE
CLOWNTREE
LEISURE
CENTRE
TRAVELODGE
MAIN SHOPPING DISTRICT
JOPLINGS
DEPT STORE
TRAVELODGE
PRIMARK
TEN PIN
BOWLING
VAUX
BREWERY
SITE
BRIDGEHOUSE
SUNNISIDE
LEISURE
ST MARY’S
CAR PARK
ECHO 24
RIVER WEAR
SITUATION
The property is situated on
High Street West in the heart of
Sunderland’s principal leisure
destination, approximately
250 metres to the north-east
of the station. The primary
frontage to the property is on to
High Street West, leading onto
Lambton Street. To the north of
the development is West Wear
Street (A1018) linking St Mary’s
Way (A183) at the junction of
Bridge Street.
Wearmouth Bridge provides a link
to the northern part of the city, the
Stadium of Light and the Sunderland
Aquatic Centre.
The scheme benefits from being
adjacent to a modern tenpin bowl,
operated by 1st Bowl, adding critical
mass to this leisure destination.
In additon, a modern 82 bed
Travelodge hotel opened in
November 2012.
The Bridges Shopping Centre, owned
by Land Securities, is located less than
340 metres south west of Sunniside.
The scheme, comprising 500,000 sq ft is
anchored by, amongst others, Primark,
Debenhams, Top Shop, H&M, Dorothy
Perkins, Superdry, River Island and Boots.
As part of the Local Authority’s 15 year
master plan for Sunniside East, land
to the east of the subject property
is destined for future mixed use
development incorporating retail,
office and commercial business space.
PREMIER INN
CITY PROFILE
Despite current economic
conditions, Sunderland has recently
benefited from numerous privatesector investment projects creating
over 3,500 jobs and attracted the
first Enterprise Zone investment.
■■ In November 2012, Land
Securities invested £15 million
on the extension of The
Bridges Shopping Centre and
opened its new 60,000 sq ft
Primark store.
■■ In December 2012, Nissan
announced plans to invest a
further £250m at its facility in
Sunderland, creating around
3,000 jobs at its plant and in
the supply chain.
■■ 82 bed Travelodge hotel
opened November 2012 in
Sunniside East.
■■ 125 bed Premier Inn hotel
neighbouring Sunderland
University, expected to open
in Q3 2014.
■■ A new Hilton hotel
neighbouring the Stadium
of Light, Sunderland’s
Premiership Football Club, is
expected to open in 2015.
■■ Planning permission was
granted in March 2012 for the
redevelopment of Joplings
Department Store to provide
a 119 bed hotel on the upper
floors and retail and leisure on
the ground floor.
■■ The location for a new
500,000 sq ft central business
district, the 26 acre former
Vaux Brewery site, has been
acquired by the council, and is
being enhanced in preparation
for investment.
■■ In partnership with BT,
Sunderland will become the
first city in Britain to offer
wall-to-wall superfast
broadband coverage.
■■ St Modwen and Persimmon
Homes have submitted plans
to the council for the £10m
redevelopment of the 17 acre
former Pyrex site, located off
Pallion New Road, to build
212 family homes.s
Other substantial investments in
the city include:
♦♦
£82.5m for the New Wear
Crossing from the Department
for Transport.
♦♦
£8m from Gateshead College
for a Skills Academy for
Sustainable Manufacturing
and Innovation.
♦♦
£6m for managed workspace
in Washington, jointly
funded by the City Council
and European Regional
Development Funds.
At present, Sunderland is clearly
an attractive proposition for
businesses, with more than 50
‘live’ enquiries from prospective
investors considering the city as a
place to do business.
DESCRIPTION
Developed in 2004, the property
comprises a modern leisure
scheme arranged as two adjacent
buildings. One building retains
a historic, listed façade which
fronts High Street West and
comprises a 12-screen cinema
and 5 food and beverage units.
The other building comprises a
casino and multi-storey car park
(650 spaces).
The total GIA is 91,374 sq ft and the
site extends to 2.97 acres (1.2 ha).
Sunniside leisure scheme is the
only cinema in Sunderland. The
scheme provides the only national
A3 operator concentration, whilst
the remainder of the city provides
for more regional brands.
The 650 space multi-storey car park
is held on a long leasehold by the
local authority, providing all users
with free parking.
TENURE
ACCOMODATION
Long Leasehold.
999 year Long leasehold title
from the Council of the City of
Sunderland at a peppercorn rent
and commencing 25th April 2003.
Unit
eet
ear Str
West W
m
Willia
t
Stree
Bedfo
as
Cinem
e
rd Str
et
High
est
Street W
Use
Area
(sq m)
Area
(sq ft)
1 Ground Floor
(Empire)
Cinema
3,956.5
(3,623*)
42,587
(39,000*)
2 Basement / Ground /
Mezzanine
(Grosvenor)
Casino
2,271
(1,819*)
24,443
(19,577*)
3 Ground Floor
(Frankie & Benny’s)
A3
380.9
4,100
1A Ground Floor
1C First Floor
(Dozo restuarant)
A3
A3
403
850.5
4,338
9,154
1B Ground Floor
(ASK)
A3
270.4
2,911
2A Ground Floor
(Nandos)
A3
325.3
(306.6*)
3,501
(3,300*)
2B Ground Floor
(Empire)
A3
31.6
340
8,489.5
(7,685*)
91,374
(82,720*)
TOTAL
* Assumed areas in leases
The property has been measured
on a Gross Internal Area (GIA) basis
in accordance with the RICS Code
of Measuring Practice (6th Edition)
as follows:
TENANCY
Lease Start
Lease Expiry
(TOB)
Next Rent
Review
Area
(sq ft)
Rent Passing
(per annum)
Rent
(£/sq ft)
Sunderland Cinema 2 Limited
(T/A Empire Cinemas)
Guarantors: Cine UK Limited and
Cinema Holdings 2 Limited
03/09/04
02/09/29
03/09/14
39,000
£535,283
£13.73
2
Gala Casino 1 Limited
(T/A Grosvenor Casinos)
Guarantor: Rank Group Gaming Division
Limited
03/09/04
02/09/29
03/09/14
19,577
£173,891
£8.88
3
The Restaurant Group (UK) Limited
(T/A Frankie & Benny’s)
03/09/04
02/09/29
(02/09/19)
03/09/14
4,100
£65,875
£16.07
1A &
1C
Kandaya Limited
(T/A Dozo Buffet Restaurant)
24/08/11
23/08/31
(24/08/21)
(24/08/26)
24/08/16
13,492
£94,500
£7.00
1B
Ask Restaurants Limited
03/09/04
02/09/29
13/01/15
2,911
£54,325
£18.66
Not in occupation. Ongoing negotiations with
alternative occupier.
2A
Nando’s Chickenland Limited
(T/A Nando’s)
03/09/04
02/09/29
03/09/14
3,300
£57,750
£17.50
Floor area shown is assumed, actual floor area is
3,501 sq ft.
2B
Sunderland Cinema 2 Limited
(T/A Empire Cinemas)
Guarantor: Cinema Holdings 2 Limited
27/06/05
26/09/20
27/06/15
340
£7,000
£20.59
To be used as additional sales of merchandise.
Car
Park
City Council of Sunderland
03/09/04
990 years
remaining
Unit
Tenant
1
TOTAL
–
82,720
£988,624
Comments
Min Fixed Uplift in September 2014 to £605,622 pa.
Floor area shown is assumed, actual floor area is
42,587 sq ft.
Currently being rebranded as Grosvenor Casino.
Fixed uplifts at 5th & 10th review to 3% pa
compounded. £60,000 rent deposit is held.
Peppercorn rent.
COVENANT ANALYSIS
CINE-UK LTD (GUARANTOR)
(EMPIRE CINEMAS)
Sunderland Cinema 2 Ltd is an SPV. Empire Cinemas Ltd was formed in 2005 and operates
162 screens across 16 cinemas in the UK. The lease in Sunderland is guaranteed by Cine–UK
under an AGA.
Cineworld is the second largest operator in the UK with 80 cinemas providing 818 screens.
The group has the highest number of admissions, totalling 27.3%, of all UK admissions.
The immediate parent company to Cine–UK is Cineworld Holdings Ltd and the global
parent company is Cineworld Group Plc.
Cine-UK Ltd (Company No. 3005901) has a Dun & Bradstreet rating of 4A1 showing a
Minimum risk of failure.
NANDO’S CHICKENLAND LTD
(NANDO’S)
Nando’s Chickenland Ltd is a leading restaurant chain and has 282 restaurants across the
UK. Their immediate parent company is Nando’s Finance Ltd and the group’s global parent
company is Nando’s Group Holdings Ltd.
Nando’s Chickenland Ltd (Company No. 2580031) has a Dun & Bradstreet rating of 4A1
showing a Minimum risk of failure.
THE RESTAURANT GROUP (UK) LTD
(FRANKIE & BENNY’S)
Frankie & Benny’s is a well established and leading Italian – American restaurant brand with
200 outlets nationwide. Their immediate parent company is TRG (Holdings) Ltd and the
group’s global parent company is The Restaurant Group Plc which operates 400 restaurants
and pubs.
RANK GROUP GAMING DIVISON LTD
(GUARANTOR)
(GROSVENOR CASINOS)
Grosvenor Casinos is Great Britain’s leading casino entertainment brand.
In 2012, Grosvenor Casinos recorded another period of revenue and
operating profit growth (up 4.2% and 10.9% respectively). The Group’s
37 casinos contribute 52% of Rank Group operating profit before
exceptional items and central costs.
The Restaurant Group (UK) Ltd (Company No. 894426) has a Dun & Bradstreet rating of 5A1
representing a Minimum risk of business failure.
Rank Group recently completed on the acquisition of 19 casinos operated
by Gala Casinos from Gala Coral Group Ltd for circa £179million. All casinos
will be shortly rebranded as Grosvenor Casinos. The tenant will be Gala
Casino 1 Ltd with Rank Group Gaming Divison Ltd as guarantor.
ASK RESTAURANTS LTD
Rank Group Gaming Divison Ltd (Company No. 3213743) has a Dun &
Bradstreet rating of 5A1 representing a Minimum risk of business failure.
ASK Restaurants Ltd operates 117 restaurants. It forms part of the Gondola Group of companies,
the market leader in the UK casual dining sector.
ASK Restaurants Ltd (Company No. 2792998) has a Dun & Bradstreet rating of 5A1
representing a Minimum risk of business failure.
KANDAYA LTD
(DOZO BUFFET RESTAURANT)
Kandaya Ltd (Company No. 7506418) has a Dun & Bradstreet rating of N2
representing a lower than average risk of business failure. A £60,000 rent
deposit is held.
D&B Reports can be provided upon request.
ASSET
MANAGEMENT
■■ Opportunity to complete a surrender and new letting on the ASK restaurant unit.
■■ Create a stronger leisure centre identity and profile, with improved branding
and signage.
■■ Build upon the strong trading of the cinema which has improved average
attendances to in excess of 550,000 per annum over the last 3 years.
PLANNING
Sunniside was redeveloped in 2003-2004 under planning permission (Ref 02/01683/
AME) which amends the earlier permission (Ref 00/00641/AME).
Part of the property accommodating the restaurant and bars has retained an original
and listed façade and sits within the central conservation area of Sunderland. The listed
status means there is nil rates liability on any voids under current legislation.
A copy of the original planning consent and the conditions contained therein is
available on request.
ENVIRONMENTAL
In 2010, Delta-Simons’ carried out a Phase 1 Environmental Inspection which concluded
that the site was at low risk of environmental hazard or identifiable contamination.
WE ARE SEEKING OFFERS IN EXCESS OF
£12,900,000 (TWELVE MILLION NINE
HUNDRED THOUSAND POUNDS) WHICH
PRODUCES THE FOLLOWING YIELD PROFILE:
A copy of the survey and EPCs are available on request.
VAT
We understand this property has been elected for VAT which will therefore be
chargeable on the sale price unless the transaction can be treated as a Transfer of Going
Concern (TOGC).
NIY: 7.25%
RUNNING YIELD SEPTEMBER 2014: 7.75%
RUNNING YIELD AUGUST 2016: 7.87%
CONTACT
For further information please contact:
5 Bolton Street, London WIJ 8BA
www.montagu-evans.co.uk
Edward George
Mark Girling
D: 020 7312 7489
E: edward.george@montagu-evans.co.uk
D: 020 7312 7460
E: mark.girling@montagu-evans.co.uk
Freddie James
Nick Richardson
D: 020 7866 8613
E: freddie.james@montagu-evans.co.uk
D: 020 7312 7420
E: nick.richardson@montagu-evans.co.uk
Misrepresentation Act 1967 and Property Misdescriptions Act
Montagu Evans LLP for themselves and for the vendors or lessors of this property whose agents they are, give notice that:
1 The particulars are set out as a general
2. All descriptions, dimensions, references to
guideline only for the guidance of intending
condition and necessary permissions of the
purchasers or lessees and do not constitute
use and occupation, and other details are
the whole or any part of an offer or contract.
given in good faith without responsibility
whatsoever and any intending purchasers
or tenants should not rely on them as
statements or representations of fact, but
must satisfy themselves by inspection or
otherwise as to the correctness of each of
them.
3. Montagu Evans LLP nor their employees
has any authority to make or give any
representation or warranties whatsoever in
relation to the property.
4. Unless otherwise stated, all prices and
rents are quoted exclusive of VAT and
intending purchasers or lessees must
satisfy themselves independently as to the
applicable VAT position.
5. All the plans and maps provided within the
particulars are for identification purposes
only.
Designed and produced by THE
GROUP
www.completelygroup.com
October 2013 | Ref: 11473