AUTUMN/WINTER 2017 - savills.co.uk/leisure
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AU T U M N / W I N T E R 2 017 savills.co.uk/leisure
02
INTRO
Welcome to the Autumn/Winter edition of Aspects
of Leisure. 2017 looks like being a year when, despite
economic and political uncertainty, property markets
have proved to be more resilient than expected. Certainly
in the leisure sector, the weakened Brexit pound has had
the effect of boosting the financial performance of many
businesses and the outlook remains positive.
There has been no significant adverse effect on the transactional
markets, nor on funding, and the weight of investment seeking returns
from the property sector does not appear to be diminishing. It is true to
say that the exceptional prices paid for some properties over the last
few years, particularly by foreign investors, have largely disappeared
from most sectors but commercial buyers have the confidence and
ability to buy, supplementing the lifestyle buyers and private equity
backed companies continuing to invest. In general the markets
remain firm.
In this edition we look at sports grounds, the golf market both in the UK
and abroad, the hotels market and a focus on the south-west leisure
market. As a fringe subject, we also include an overview of Savills
Archaeological services.
Whether you’re an established leisure operator or new to the leisure
sector considering an investment, we think you should find something
of interest here.
Ian Simpson
Head of Department
AUTU M N / WINTER 2 017
03
SPORTS GROUNDS // 04
H O L I D AY C A R AVA N & L O D G E PA R K S // 06
THE SOUTH WEST LEISURE MARKET // 08
PUBS // 10
EUROPEAN GOLF // 12
GOLF // 14
HOTELS // 16
S AV I L L S A R C H A E O L O G I C A L S E R V I C E S // 18
H O L I D AY C O T TA G E S // 19
AUTU M N / WINTER 2 017
04
SPORTS GROUNDS
S P O R T S G R O U N D S VA L U E S A R E D E R I V E D D E P E N D I N G O N
T H E A S S E T, U S E , A N D L O C AT I O N
Statistics suggest that 20% of the population are obese and if the current trends of weight gain continue almost
three quarters of the population will be overweight by 2035. As we all know this is putting pressure on our
already over subscribed health services.
These worrying statistics about the nation’s In Britain we have fewer sports grounds
health mean that the need to eat healthy than we used to. Sports grounds provide
and exercise is more obvious than ever. Around 1.85 million people play attractive development opportunities,
football, 196,000 participate in
Encouraging the population to be involved because they are usually in a built up
rugby union, and 180,000 play
in sports is an important part of this goal cricket on a weekly basis. These area and are often well positioned for
and one that Sport England is encouraging. participants make use of facilities housing development. The Conservative
More and more of us are turning to the owned by communities, schools, government are known to have sold over
gym for convenience and body building local clubs and professionals clubs 10,000 playing fields during their time in
and it is by far the fastest growing area of and businesses alike. office between 1979 and 1997, and since
participation. It is estimated that 15.6 million then successive governments are reported
of us regularly take part in sport, with 1.75 to have sold around 20 per year. Local
million fewer women than men. Authorities are under financial pressure
due to austerity to dispose of assets and
community sports facilities are one area
which has felt the squeeze.
AUTU M N / WINTER 2 017
05
According to Sport England, the government Sports grounds have their values derived in a
body whose job it is to reject development number of ways depending on the asset, its
which negatively affects sports provisions, use and location. Approaches can include
out of all concluded planning applications the investment method where the property
that involved a playing field in 2014 to 2016 is let, the profits method where there is a
around 91% resulted in improved or secured profitable business, and comparison to
sporting facilities. This shows some slow other properties with similar characteristics.
down in loss of facilities. Savills are happy to provide valuations for all
purposes on assets in this use type.
Sports England have produced guidance
for clubs and community groups to take
action if they are concerned that their sites
are at risk of being sold for development, Savills Leisure team’s recent work
has included valuing community
mothballed or closed. There are now
sports assets including a semi
community rights to protect the local sports professional rugby club, a local bowls
pitches, pavilions, sports hall or swimming club, football playing fields owned by
pool and for them to be listed as an Asset a semi professional football club and
of Community Value which protects them a well known tennis club. We also
provide professional advice and are
from development. Local authorities are
currently supporting a local parish
also becoming more interested in rights council argue against an increase in
for communities to bid to buy the facility or the rent of their cricket field.
agree to a transfer as this reduces the bill to
the Local Authority.
AUTU M N / WINTER 2 017
06
H O L I D AY C A R AVA N
& L O D G E PA R K S
I N G E N E R A L T H E H O L I D AY C A R AVA N PA R K M A R K E T R E M A I N S
R E S I L I E N T I N U N C E R TA I N T I M E S
Recent market reports across many property It has been 10 long years since the effects Larger parks of say 200 plus holiday units
sectors including the residential housing of the Global Financial Crisis (GFC) were first have continued to receive strong interest
market have described the market in an felt in the UK and investors have become from private equity investors and as a result
uncertain or negative light. However, the accustomed to difficult market conditions. the demand for larger parks is significantly
opposite could be reported on the holiday The one synergy shared by the leisure higher than that of lifestyle parks.
parks sector as the industry is experiencing market and that of other property sectors
growth and a continued sense of optimism is its reliance on banks to fund property In general the holiday caravan park market
from operators and caravan manufacturers. transactions. The banks have had an on remains resilient to uncertain economic
According to the NCC manufacturing of and off relationship with holiday parks over conditions and continues to demonstrate
holiday units is on the rise as their members this period which has resulted in lenders growth, drawing positives from the
have reported a 7% increase in relation to taking a more cautious approach to lending continuing Brexit negotiations, the ensuing
dispatches of static caravans and lodges even though trading conditions for holiday economic conditions and atrocities abroad
to UK holiday parks. The total number of parks are at a 10 year high. Buyers of parks in key tourism locations such as the August
units dispatched over a 12 month period are noticing stricter lending criteria than 10 2017 Barcelona attacks. Holidaymakers are
(summer 2017) was 21,075 which is a years ago with perhaps the greatest obstacle adopting a trend of staying closer to home
significant improvement on the previous being significantly lower loan to values with whether for security or economic reasons
year figures of 19,575. buyers required to find additional funds to with exotic holidays no longer being their
be able to raise a deposit. This has had the sole priority. The larger operators within the
greatest impact on lifestyle buyers typically industry are heavily investing in their parks
seeking smaller holiday or touring caravan
parks of in the region of 100 pitches or less.
AUTU M N / WINTER 2 017
07
and attacking emerging markets with gusto. high but with a distinct lack of parks on
By providing more up market caravan, the open market, the combination of low
lodges or glamping units often with enticing supply and high demand has transformed
extras such as onsite facilities or private the marketplace from a buyer’s market to
hot tubs, operators are able to offer a new a seller’s market. Many park operators are
holiday experience which is a far cry from now taking advantage of these conditions
the budget breaks often associated with seeking to sell their parks confidentially,
holiday parks. Holiday letting firms such as often resulting in a number of buyers
Hoseasons are thriving offering significant competing for the same property.
returns to park operators, not only for single
holiday caravans but in particular lodge units We are optimistic about the market
resulting in many operators adopting a hire conditions for the holiday parks sector
fleet to boost revenue. in the short term and looking forward to
the 2018 season. The outlook is positive,
The end of the holiday season is approaching and an increase of parks to the market
for many parks and the caravan park market over the autumn should help to satisfy the
is looking buoyant, as this is typically the considerable demand. If you are actively
time of the year where buyers come out seeking to purchase a holiday park we would
from the woodwork proactively seeking recommend speaking to your agent to see
parks. Demand at this time is exceptionally what they have confidentially available.
R E C E N T S I G N I F I C A N T T R A N S A C T I O N S W I T H I N T H E I N D U S T R Y:
Park Holidays (UK) Ltd acquired
Carlton Meres Park a 300 pitch park PROPERTY
in East Anglia increasing their current SHOWCASE
portfolio to 19 parks.
For Sale: Confidential
Holiday and
Pentney Park, a family run park, was sold to Darwin Leisure Residential Park
Group by Savills in June 2017. The group are well known
for developing upmarket holiday parks. The park was Guide Price: £6 million
developed for circa 200 touring caravans and Darwin will Location: Lancashire
be undertaking a scheme of redevelopment to upgrade
the property to an upmarket holiday park. Developed to accommodate
94 residential mobile homes
and 121 holiday static caravans
and lodges. Main building
to include club with 2 bars,
Acquisition of Island View Holidays, function area, indoor swimming
Isle of Wight for £11m by a private pool, sauna, coffee shop, office
equity company AG Holidays Parks. & entertainment centre (EPC -
C). In all approximately 18.431
acres (7.459 ha).
AUTU M N / WINTER 2 017
08
THE SOUTH WEST
LEISURE MARKET
T H E B R I T I S H H O L I D AY S E C T O R I S S H O W I N G
NO SIGNS OF SLOWING DOWN
The south west leisure market is continuing have improved and stabilised over the past with the view to developing and expanding
to thrive with park operators consistently few years most park operators are keen to this further over a period of 3 to 5 years.
reporting a strong trading season to date. further develop and enhance their business Such purchasers are focusing on the existing
to cater for the strong levels of demand that trading abilities of the businesses in question
We are currently experiencing a surge in are currently being experienced. and the ability to improve on this over time as
supply of investors looking to enter the leisure a result of significant capital investment.
market, a number of whom are focusing their
searches on the south west of England. The second type of purchaser are existing
The majority are backed by private equity The supply of capital that has park operators who are looking to expand
been allocated for investment into
investors so are well funded with significant their leisure portfolio, specifically focusing on
the south west leisure market far
levels of capital that they are not able to outweighs the current supply of sale parks that have development opportunities.
deploy. The difficulty that such purchasers opportunities. Such purchasers are willing to speculate on
are having is that there are very few small development opportunities and under-trading
groups of parks in existence, and those that parks that have redevelopment potential.
do exist simply to not wish to sell in such There are two separate categories of
strong trading conditions. The south west purchaser who are most active in the market Whilst the outcome of the currently unsettled
leisure market in particular was hit very hard at present. The first are those who are new economic climate is yet to be established,
by the most recent recession and took a long to the market and appear to be focusing on the British holiday sector is showing no signs
time to recover. Now that market conditions rapidly establishing a presence in the sector, of slowing down.
AUTU M N / WINTER 2 017
09
L E Y C R O F T VA L L E Y
H O L I D AY S
FOR SALE
Log cabin, tree house and bungalow holiday
park set within a wooded valley on the
outskirts of Perranporth in north Cornwall.
26 of the units are owned by the park and
operated as a letting hire fleet through
Hoseasons as part of their Autograph lodge
Holidays Collection. For sale with a guide
price of £3m.
AUTU M N / WINTER 2 017
10
PUBS
THE PUB MARKET APPEARS TO BE IN ITS
STRONGEST POSITION FOR MANY YEARS
It is estimated that 1,200 pubs will close in Additionally, beer sales volumes have
2017. However, use of Assets of Community O P E R AT O R F O O D A S declined for a number of years. BBPA figures
Value and loss of permitted development % O F T O TA L S A L E S show a 2.7% decline in Q117 compared to
rights mean fewer are being sold for a 2.8% increase in off-trade sales, most likely
alternative use. The pub sector is expected Mitchells & Butlers 51% linked to changing consumer preferences
to grow by 1.5% and, in a declining market and availability of cheap supermarket
of 2.1%, this means real growth of 3.6%. Is product. Fuller’s and Martson’s have
Greene King 40%
this enough to counter the increasing costs reported they would need LFL growth of 4%
pubs face? and 2% respectively to offset these costs.
Marston’s Managed 60%
The post-recession consumer has become Despite these factors, the pub market
more discerning, but despite current appears to be in its strongest position for
economic pressures, is still spending in J D Wetherspoon 35% many years. Average weekly sales continue
pubs. Eating out is now a way of life and to rise in most instances with operators
around three quarters of adults regularly in London and the South East producing
dine outside the home. Despite high rates Fuller’s 32% some of the strongest LFL sales growth (see
of food cost inflation, many pub operators table opposite).
are capitalising on the growth in eating out,
with the sector taking an increasing share Young’s 29%
of market. The proportion of food sales
accounted for by the largest pub operators
(see below) highlights this. At Fuller’s, food
sales have been boosted by its purchase
and roll-out of the Stable pizza brand. The 2017 ALMR Benchmarking Report
shows operating costs surpassed 50% of
Despite Brexit-related uncertainty, pub turnover for the first time (at 51.5%). BBPA
operators have not identified a particular statistics show costs rising in most business
impact on trade and transactional activity types, but actually decreasing for larger
appears unaffected. In the 2016 ALMR businesses (see below):
Benchmarking Survey, 64% of respondents
said the impact of Brexit would be broadly flat.
However, the wholesale cost for imported Business Type 2017 2016
beers has increased, putting pressure on Small Community c£4k pw 37.3% 34.8%
profit margins.
Community Wet led c£5k pw 36.4% 32.8%
Operating costs continue to rise, mainly Community Wet led c£8k pw 37.0% 33.0%
linked to the National Living Wage (NLW),
apprenticeships levy and the new rates Community Wet led c£12k pw 33.2% No Data
valuation list which has had a particular Rural Character c£5k pw 40.3% 39.1%
impact on pubs in the South East.
Rural Character c£8k pw 40.0% 39.7%
Town/Country food-led c£10k pw 37.2% 42.3%
Town centre pub/bar c£10k pw 35.6% 37.7%
Greene King 0.4% 1.10%
AUTU M N / WINTER 2 01711
% change % change
Pub Company
2014-2015 2015-2016
Young’s Managed 10.0% 7.95%
Young’s Geronimo -2.6% 0.21%
Fuller’s 8.2% 9.75%
Marston’s 1.5% 3.08%
Whitbread 2.2% 2.51%
Stonegate 1.0% 4.22%
JD Wetherspoon 4.7% 8.22%
M&B 6.4% -0.10%
Greene King 0.4% 1.10%
Demand continues to outstrip supply for The ALMR reported that accommodation saw This has also created additional competition
freehold and free of tie leases. In London, the largest LFL growth by market segment for Britain’s traditional brewers. Given the tax
this has led to an increase in rents on free of of 5.1%. Fuller’s, Marston’s and Shepherd advantages, medium sized brewers have felt
tie leases. Rent as a percentage of turnover Neame have all reported a positive outcome the squeeze. Thwaites licensed its popular
has remained at similar levels compared from adding more letting accommodation to Wainwright and Lancaster Bomber brands to
to 10 years ago, despite the increase in their estates. Marston’s in 2015 and now only brews niche
operating costs and pressures on margins. ales for its pubs. Small brewers BrewDog
The number of UK breweries rose to circa and Dark Star are branching out into pubs,
Operators are working hard to mitigate these 1,700 over the past year as the surge in seeing them as an important route to market.
factors by widening their offer to draw income popularity of craft beers continues. Yet as
from craft beer, food (including breakfast and craft beer still only accounts for 4.3% of
coffee) and accommodation. total beer sale volumes, there is room for
further growth.
AUTU M N / WINTER 2 01712
EUROPEAN GOLF
W I L L B R E X I T I M PA C T T H E G O L F I N D U S T R Y AT A L L ?
The number of golf courses in Europe has with technology and ways to attract more golf courses whilst offering a very different
more than doubled between 1985 and players, there appears a way to go. The setting and topography of course in general.
2015, with the majority of growth prior to PGA Tour has engaged with millenials Other destinations which have made an
2005, and only gradual increase in the latter through social media content and suggests entry include the Czech Republic.
ten years. The number of registered golfers that the percentage of millennials that
has followed a similar trajectory, with a slight play golf (28%) mirrors that of group’s Will Brexit impact the golf industry at all?
decrease since 2010. Whilst many sources percentage of the total population, although Golfers were quick last year to discuss
cite this as being due to the financial crisis they only play half as frequently as previous the implications for the Ryder Cup – none
there have been a number of articles and generations. Sustainability is a concept that apparently, given that the UK remains within
research which suggest that the underlying is considered in many courses, if only due to the continent of Europe and therefore
picture is more complicated than this and the economic considerations that arise from able to compete as such. Other long term
reflects a myriad of factors. heavy irrigation, numerous bunkers and impacts have become no clearer, with only
chemical treatments. A sustainable course immediate economic differences visible –
The HSBC 2020 survey (dating to 2012) aims to maximise a golfer’s enjoyment all prize money switching to dollars with the
envisaged the future of golf as being more year round and where sustainability aims drop in the pound, cheaper British golfing
international, with broader participation, and economic gains co-inside then it would holidays for visitors and more expensive
a more flexible game, more accessible, be foolish for owners not to work and trips abroad for Brits. Taxation is likely to
more technologically engaged and with develop in this manner. change and alterations to VAT laws could
more courses being sustainable in design affect clubs in regard to member and visitor
and operation. We are now three years Spain and Portugal have long been fees for non-profit making members’ clubs.
away from these projections and whilst the popular golfing destinations but France and
game is certainly exploring opportunities Germany are increasing their number of
AUTU M N / WINTER 2 01713
Nu m be r o f o f f icia l go lf co u r s e s in Eu r o pe f r o m 1 9 8 5 t o 201 5 Nu m be r o f r e gis t e r e d go lf e r s in Eu r o pe f r o m 1 9 9 0 t o 2015
8,000 ( in m illio n s ) *
5
7,000 7,016
6,714 6,740 6,811
4.44 4.39 4.39
4.27 4.33 4.33
6,236 4.11 4.14 4.15 4.14
6,000 4 3.96
5,782
3.74
3.56
Nu m b e r o f g o l f e rs i n m i l l i o n s
Nu m b e r o f g o l f co u rse s
3.4
4,867 3.19
3 2.95 3.02
2.76
2.64
4,000 2.5
3,578 2.37
2.19
3,029 2.03
2 1.86
1.71
2,000
1
0 0
1985 1990 1995 2000 2005 2010 2011 2013 2014 2015 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '13 '14 '15
Savills currently have two European Golf courses on the market:
Oceanico is a portfolio which includes Jardim da Meia Praia Leisure Facilities; Flor The other, Carton House Hotel & Leisure
two signature golf courses, over 300 do Mar Holiday Resort development site; Resort, is for sale at a guide price of €60m
holiday properties, leisure facilities, and and Royal Obidos Holiday Villa development through our Dublin office.
development land – featuring Amendoeira site (located on Portugal’s west coast,
Golf and Leisure Resort; Belmar Spa and by prominent Royal Obidos Spa and Golf
Beach Resort; Baia da Luz Residential Resort). Offers are invited.
Resort; Estrela da Luz Leisure Facilities;
AUTU M N / WINTER 2 01714
GOLF
SO, YOUR GOLF COURSE MAKES NO
F I N A N C I A L S E N S E – W H AT N O W ?
No one can deny that times have been unforgiving and many clubs have forseen It’s not easy to get it right, nor is it always
better for golf course finances. Pressures the time when their players will no longer successful, and widening the appeal of the
on turnover are manifold – an older playing accept the subscription/green fee rises facility will always involve more investment
membership as easier to learn and less necessary to support the business. and risk. For many golf courses the
time-squandering sports successfully business will not improve until the number
compete for the UKs disposable £, the Enterprising owners have made efforts of courses contracts to meet available
clubhouse bare and restaurant buzzing only to increase their player base through demand permitting turnover to rise without
when a management-organised event is subsidising juniors and teaching, attracting hitting the pocket of the individual player.
on, the proshop outgunned by the internet societies and casual golfers, providing
and discount stores........I could go on but additional facilities such as driving ranges So what options are open to the owner
there is the costs side to consider too. and hi-tech indoor course play – others who has done all he feels he can with the
Club loyalty is no longer a facet of golf – have widened their non-golf spend through existing facilities and is not convinced that
if quality falls so does the membership so events and functions, weddings, restaurant, further investment in widening the business
cutting staff and maintenance costs, and shop, adventure golf, gym and spa, is going to provide a prudent return? What
failing to meet the increasingly high modern accommodation and so on. will attract an investor/buyer to put their own
standards, is risky. Pressure on margins is equity into the property?
AUTU M N / WINTER 2 01715
Well, here are some things to consider based on Savills experience.
• There is a housing shortage at present. • If the course is in the South of England • Has any thought been given to the
Developers are keen to talk to golf it may be suitable for a vineyard. The prospect of mineral extraction? Gravel in
clubs next to, or in, towns and cities soils, aspect and location must be right particular is a scarce resource but it’s not
to gain residential development on but on the other hand, the number of the only one and if the course overlies
some or much of the course. They will opportunities for the vineyard and winery such a valuable resource the medium
either use spare land not fully used by development are few and far between, to long term value can be rewarding.
the golf course and seek residential and buyers are out there. Mannings Canford Magna Golf Club is a good
development on that, possibly building Heath Golf Club is not the only one to go example.
replacement club facilities, or privately in this direction.
buy and upgrade a nearby course to • Rather than taking out the substrata, a
move the membership to. This not only • Is the course in a location where a good number of golf course owners
puts money into the owner(s) pocket, health and fitness/golf/hotel would have used their courses to accept inert
but if the course is closed, or reduced to be a success? Proximity to a large waste, generally sorted and graded
9 holes, also reduces the supply of golf conurbation, and planning potential for construction waste, and created a new
courses thereby improving the revenues at least 100,000 square feet of new interesting landscape. Where there is a
of all local courses, and assisting a build might well attract the few buyers in good source of material, exceptionally
national housing problem. But the course the marketplace so long as there is no attractive courses have been made from
does have to be in the right place as branded facility closeby. Look at what what were previously fairly dull holes, and
does any target course to be upgraded. The Club Company are achieving with providing a handsome capital sum for
It can and is being done around the their portfolio. the golf course owner at the same time.
country – see what the Royal Norwich Examples include Wavendon Golf Club,
Golf Club and the Weston Longville Golf • Consider talking to lodge and holiday park and North Weald Golf Club.
Club are achieving. developers as there is strong demand for
low cost lodge-type accommodation at Or of course the golf club could always be
• On a smaller scale, the course could present. If the planners will play ball there let to a third party, or offered to the market
simply be closed, selling the land may well be an opportunity in this sector. as it stands. The rental market is reasonable
at agricultural/pony paddock prices Take a look at South Winchester Golf and profits are not always the driver for a
and seeking an alternative use for the Club. golf course purchaser – indulging their
clubhouse and greenkeepers buildings. hobby through ownership is a feature of the
Government Housing and Planning • Adventure golf/crazy golf developers UK market at the moment and has been for
policy is supportive of change of use are keen to open new courses. Again several years.
for existing buildings generally and location is key but this is a very popular
agricultural prices remain strong at entry point into golf and doesn’t require
present. A word with the planning officer a lot of ground. See what Hersham Golf
may help achieve a greater price than the Club have put in and they’re one of many.
golf course in existing use can command.
As examples see what the Kent National
Golf Club, and Austin Lodge Golf Club
have become.
AUTU M N / WINTER 2 01716
HOTELS
OVERSEAS INVESTORS BOOST
THE HOTEL MARKET AS THE UK
BECOMES ‘THE PLACE TO VISIT’
The UK hotel market has had a strong In the regions, domestic demand
start to the year with the first half of 2017 continues to drive improving hotel market
transacting circa £2 billion. Individual sales performance. With the weakening of the
accounted for 92% of transactions by value Pound since the EU referendum, overseas
(£1.8 billion), where appetite for big-ticket travel has become more expensive and
lots has been particularly hot. Many of these leisure seekers have consequently focused
were international buyers accounting for their attention to the UK. According to
59% of transactional value (£1.2 billion), Travelodge’s 2017 Holiday Index, 55% of
compared to the £822 million transacted by Britons are planning a ‘staycation’ this year
domestic investors. and are set to contribute £17 billion to the
UK economy in 2017.
Popular destinations for Britons are
The UK has always been viewed as dominated by the UK’s coastal destinations
a ‘safe haven’ for foreign investment
including Devon, Blackpool and Norfolk, and
into real estate, but in the current
UK hotel market, it appears overseas transactions in the hotel market to overseas
investors are set out to profit purchasers have followed suit. We note the
from more than capital security. sales of The Imperial Hotel, Blackpool to
Singapore-based Fragrance Group and the
Duchy Hotels portfolio to South African FairTree
The appeal of any hotel begins with the Capital as two examples earlier this year.
attraction of guests. Whether corporate
or leisure focused, UK hotels continue to In London, it remains all about the
prove popular with visitors as nationwide overseas tourists. 2016 saw 19.06 million
occupancy rates remain strong at 77%, and international visitors to the Capital, an
Average Daily Rates continue to increase, increase of 4.4% CAGR since 2010.
we note a 3.3% three-year Compounded VisitBritain further recognises that the USA
Annual Growth Rate (CAGR). This is in spite and Europe continue to visit the UK most,
of the headwinds of the last six months such with Asian visitor numbers rapidly growing
as the general election, terrorist attacks in in light of the simplified visa system. Over
London and Manchester and the ongoing the last decade, London hotel’s Revenue
uncertainty following Brexit. Per Available Room has closely tracked
overseas tourist arrivals. As projections for
international visits look set to grow, London
hotels are set to out-perform historic highs
and support a strong transactional market.
AUTU M N / WINTER 2 01717
Demand for London assets remains at an Domestic investor buyers are having to seek Savills are forecasting that the UK hotel
all-time high despite the scarcity of stock alternative ways to remain competitive in an market will transact circa £5.1 billion this
pushing. This is pushing high values as both increasingly international investors market year, 28% up on the 2016 total of £4 billion.
established investors and new entrants are in addition to which is an increased level of Whilst a sustained and balanced economy
looking to take advantage of the current demand coming from private family office is not guaranteed, as overseas investors
environment of low exchange and interest investors that are willing to take planning become more comfortable with the UK
rates. In H1 2017, 55% of transactional risk on less conventional opportunities market we anticipate continuled growth
value was attributed to London hotels, including development and conversion of new concepts, brands and operators
reaching circa £1.1 billion. In recent months, projects across the City. Many London looking for rapid expansion in the current
the market has witnessed an influx of South Owner Operators, find themselves at an favourable market conditions.
East Asian investors with bespoke and interesting crossroad – whether to take
independent brands looking for a foothold an early exit from existing assets and take
in London. Key transactions for the year advantage of the strong performing and
thus far include the JW Marriott Grosvenor supply-constrained market or bunker down, Savills Hotels department offers a
wide range of services including
House Hotel, South Place Hotel and the reinvest and look to alternative value-adding
valuation, acquisitions, disposals
Capital & Levin Hotels in London which all projects within their existing businesses. and operator searches. Furthermore
sold to overseas investors. our cross discipline services, some
Since Brexit, UK hotels have become of which include development,
approximately 24% cheaper to foreign planning and rating, can ensure your
investors. This currency shift has allowed new scheme maximises it’s potential.
international entrants to the UK market as
the favourable exchange rates has boosted
spending activity. The anticipation of a softer
Brexit will provide further comfort, encouraging
development and relieving pressure on
staffing, all key factors when considering a
purchase in the UK hotel market.
AUTU M N / WINTER 2 01718
S AV I L L S
ARCHAEOLOGICAL
SERVICES (SAS)
TA K I N G T H E PA S T I N T O T H E F U T U R E !
The British Isles positively brims with heritage and clients in order to allow you to consider Since its conception, Savills Archaeological
assets, be they buried archaeological sites, which might best fulfil your needs. We are on Services have successfully contributed to
monumental stone complexes, castles or hand to advise you of the best way forward a number of large and small-scale projects,
cottages, medieval barns or mansions. This and will be happy to discuss each project with and frequently work in close collaboration
rich landscape, much like a palimpsest, you on the phone, via email or in person at with internal colleagues across divisions
both provides and informs the narratives one of our offices. Our services are UK-wide, including Conservation Architecture, Estates
that give places in Britain their meaning(s), and we have long-established relationships management, Residential sales, Country
interest as tourist attractions, and their value with key consultees across counties. Houses, Building Consultancy, Planning and
as national treasures. Development and Commercial Heritage,
Dr Paula Lutescu-Jones is Savills’ own Principal as part of a multidisciplinary team which
Savills Archaeological Services has formed Archaeologist and Heritage Consultant, continues to grow and in response to our own
in response to the national legislative and with specialist expertise in the assessment and clients’ needs.
local policy protection afforded to the nations of archaeological potential, landscape
heritage, and expands the comprehensive archaeology and burial archaeology. She Rather than being a matter for the past, the
expertise offered by Savills to our clients. provides a wide range of clients across the protection and enhancement of heritage
Whether in support of planning applications, UK with expert guidance on all archaeological assets through sustainable development has
listed building consent or through the provision matters relating to planning and development, become very much a part of our present and
of consultancy and advice to landowners, heritage constraints and opportunities for the future. Constraints can be a daunting
estate managers, or the buyers and sellers enhancement, and develops mitigation prospect for developers, planners and
of properties, we ensure compliance with the strategies in liaison with clients and statutory clients alike, and timely advice is paramount
latest heritage policies. consultees (LPAs, Historic England and in avoiding costly delays and setbacks. We
CADW) and manages archaeological fieldwork are here to ensure that Savills clients receive
One of our key products is commonly termed projects and subcontractors on behalf of the highest standard of care, and that our
a ‘Heritage Statement’. These statements can clients. Paula has directed archaeological colleagues have the in-house expertise they
take the form of an appraisal, an assessment fieldwork and conducted desk-based need to answer all those awkward questions,
of significance, a desk-based assessment research and settings assessments across whenever they might arise.
or a settings assessment according to the sites Southern and Western England, the
scope and requirements of the given project, Midlands and Wales since 2003, and remains
the client and the statutory consultees. For this an active academic researcher with numerous
reason we work closely with our colleagues internationally reviewed publications.
AUTU M N / WINTER 2 01719
H O L I D AY
C O T TA G E S
P R O P E R T I E S W H I C H A R E W E L L L O C AT E D ,
P R O P E R LY P R E S E N T E D A N D A P P R O P R I A T E LY
P R I C E D A R E AT T R A C T I N G G O O D I N T E R E S T
The UK cottage complex market has Recently, institutional and private equity After a challenging beginning to the year,
traditionally been closely aligned with backed purchasers have entered the Savills in the South West has seen an
performance of the residential market. UK market, seeking well located, larger uptick in the number of sales agreed on
Many purchasers in the sector choose to complexes which offer good stabilised these types of properties and expect to see
release equity in their homes to finance the income streams and opportunities to a strong second half of the year in terms of
purchase of a lifestyle business, and are improve profit conversion when added to a transactions.
therefore equity backed, however, for the trading group. These purchasers will have
more aspirational buyers, bank debt will play access to cheap debt and in most cases The EU referendum has also had a tangible
an important role. The current climate of debt will gear their borrowing to take advantage impact on the trading performance of
availability means that for those purchasers of this. cottage complexes, with properties across
with a reasonable amount of equity, and the South West reporting year-on-year
a robust and well-tested business plan, Since the vote to leave the EU the market increases in both occupancy and rates
commercial debt is available. If there is an has effectively become two speed, with achieved The fall in the value of Sterling,
option to purchase the ‘owners’ house on a complexes priced up to around £1.5m geopolitical uncertainty and terrorism related
separate title there is also the opportunity to attracting strong interest, while those above incidents abroad, have led to more people
source a conventional residential mortgage face challenges in attracting substantial choosing to holiday in the UK. Concurrently
on this element. attention. That said, despite the headwinds it also cheaper for foreign holiday makers
of the general election, continuing economic to visit and there has been an upswing
uncertainty and the ongoing negotiations in inbound tourism, particularly from
with Europe, the market fundamentals continental Europe, which is set to continue.
remain strong, with appropriately priced,
well-located, properly presented properties,
attracting good interest.
AUTU M N / WINTER 2 017A S P E C T S
Sectors
GOLF VISITOR ATTRACTIONS LICENSED PREMISES TRADE-RELATED PROPERTY
Courses Theme parks Public houses Ports and airports
Driving ranges Museums and heritage centres Restaurants Waste transfer and recycling
centres
Golf developments Children’s activity centres Bars
Abattoirs and food processing
Golf and country clubs Wildlife parks
HOTELS Crematoria, graveyards and
woodland burial sites
HOLIDAY PROPERTIES WATER-BASED LEISURE City centre
Religious facilities
Static & touring caravan parks Marinas and moorings Country house
Nurseries and garden centres
Holiday resorts and villages Piers Resort
Schools and colleges
Holiday cottage complexes Sports and activity lakes Business
Mineral extraction sites
Lodge and chalet parks Fishing complexes Budget
Timeshare resorts and Sites and schemes ENERGY
complexes EQUESTRIAN
Photovoltaic
Racecourses URBAN LEISURE
MOBILE HOME PARKS Wind turbines
Studs and training Bowling centres
SPORTS VENUES establishments Anaerobic digesters
Cinemas
Health and fitness clubs Polo facilities Waste to energy
Theatres
Sports grounds Riding schools Traditional generation
Snooker clubs
Motor sports venues Livery yards
Night clubs
Shooting schools Equine health centres
Casinos
Ski centres and resorts Bingo clubs
Leisure centres
Services
• Valuation • Planning • Rating • Expert witness • Sales • Lettings
Oxford Chester Exeter Southampton Manchester London
Wytham Court 16 Grosvenor Court Sterling Court 2 Charlotte Place Belvedere 33 Margaret Street
11 West Way Foregate Street 17 Dix’s Field Southampton 12 Booth Street London
Oxford OX2 0QL Cheshire CH1 1HN Devon EX1 1QA Hampshire SO14 0TB Lancashire M2 4AW W1G 0JD
+44 (0) 1865 269 000 +44 (0) 1244 328 141 +44 (0) 1392 455 794 +44 (0) 23 8071 3900 +44 (0) 161 244 7709 +44 (0) 020 7409 8060
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