PRIME SOUTH EAST PREMIER INN AND LEISURE INVESTMENT - REGENT STREET, LUTON LU1 5FA
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PRIME SOUTHEAST
PREMIER INN AND
LEISURE INVESTMENT
REGENT STREET, LUTON LU1 5FA
REGENT STREET | LUTON 1
INVESTMENTSUMMARY
Prime south east investment comprising a Premier Inn Hotel,
guaranteed by Whitbread Group PLC, including modern
health club and city centre car park.
Luton is an established commercial centre benefiting from
excellent communications being situated in close proximity
to the M1 Motorway, A6 and A505 dual carriageway and
London Luton International airport.
Luton has an estimated primary catchment population of
337,000 people (Promis) with 870,326 living within 20 km
of the town centre.
Freehold.
Well secured income with approximately 25 years unexpired
(20 years term certain) to Whitbread Group PLC (t/a Premier
Inn) and 12.5 years unexpired to Britannia Parking Limited
and Bannatyne Fitness Limited. The health club lease
benefits from a Hilton Worldwide Limited guarantee.
WAULT of 17.5 years to lease expiry.
80% of the income benefits from minimum uplifts thereby
providing guaranteed reversion. A purchase at this level reflects the following attractive yield profile:
75% of total income is let to tenants with a Dun and
Net Initial Yield 7.00%
Bradstreet rating of 5A1 or 5A2.
Running Yield December 2016* 7.45%
Total net current rent passing of £1,142,997 per annum.
We are seeking offers in excess of £15,440,000 (Fifteen Running Yield November 2018* 7.80%
Million Four Hundred and Forty Thousand Pounds),
subject to contract and exclusive of VAT, assuming
Equivalent Yield 7.70%
purchaser’s costs of 5.80%. * Running yield assumes 3% fixed growth on Britannia and 2% CPI growth on Premier Inn.
REGENT STREET | LUTON 2
LOCATION SITUATION
Luton is a busy and well established the A6 trunk road and the A505 dual The property is situated in a highly accessible location the Local Council Offices, the Police Station and the
commercial centre located approximately carriageway, which links the A1 and A5. on Regent Street, which is just to the south of Luton Law Courts.
7 miles east of Dunstable, 12 miles north town centre, off the inner ring road (A505). The
Luton benefits from regular train services The A505 provides convenient access to the M1
of Hemel Hempstead, 13 miles north of development is 6 storeys high and is very prominent
to Central London with a quickest Motorway and Luton airport, which is one of London’s
St Albans, 15 miles west of Stevenage and visible from the Chapel Viaduct, which is part of
journey time of 35 minutes. five international airports.
and 35 miles north of Central London. Luton’s inner ring road, and is used by large volumes
Luton also benefits from an International of traffic on a daily basis. London Luton airport is set to see a rapid growth of
The town enjoys the benefit of excellent
airport, which offers both scheduled and air traffic and services in the foreseeable future, with
road communications as it is strategically The property lies approximately 300m from the prime
chartered flights. passenger numbers set to increase over the next
situated adjacent to junctions 10 and 11 of shopping areas of Luton, including George Street
10 years with aims of having an extra 45,000 flights
the M1 motorway and is also well served and The Mall shopping centre, where major retailers
totalling 18 million passengers per annum, compared
by a number of primary roads including include Debenhams, Next, Top Shop and Marks &
to the current 9.8 million passengers per annum. This
Spencer’s. Given its town centre location, the subject
will place London Luton Airport firmly in the top 5 of
property is within close walking distance to a large
the UK’s international airports.
number of town centre workers, shoppers
and residents. Further to this, the regeneration of the 55 acre
M6 Toll
M1 Peterborough Vauxhall site by The Augur Group will provide a boost
The subject property is surrounded by a variety of
M5 to the town’s economy, with outline planning consent
M6 A1(M) uses reflecting its town centre location. In particular
gained for 625 new homes as well as a supermarket,
there are a number of surrounding multi-storey offices
hotel, 340,000 sq ft of offices and 180,000 sq ft of
M45 on Stuart Street which are an excellent source of
A14 storage and industrial space.
Northampton potential membership for Bannatynes, these include
M40
Cambridge 14
15
A1
14
M1 M11
13 A505
A6
Cheltenham A5 LUTON
12
Hemel 11 910
Hempstead 8 7
Oxford A10
M1 M25
Swindon M40
M4
Reading M25
M4
London
M4
M26
M25
This map is published for the convenience of identification only. Any site boundaries are indicative only and should be checked against Title Deeds
REGENT STREET | LUTON 3
DEMOGRAPHICS
Luton has an estimated primary catchment population of 337,000 people (Promis)
with 870,326 living within 20 km of the town centre. The town is also expected to see
significantly above average growth in population compared to the rest of the UK
over the period 2014-2018.
LE
AG
RA
VE
A5228
DESCRIPTION
RO
The subject property comprises a hotel, health club and
NEW BEDFORD ROAD
AD
11 A5228
A505 multi storey car park.
DU
NS
TA
B
The Premier Inn Hotel offers modern accommodation
LE
A5065
RO
AD with high quality contemporary furnishings and décor
THE MALL
HAT
T ER
SW
AY
SHOPPING featuring 120 air conditioned en-suite bedrooms, 24
CENTRE
A505
hour reception, restaurant and bar and benefits from
A6
ALL WAY
A505 dedicated parking on the top floor of the car park.
A6
CH A6
AP UNIVERSITY LONDON The multi storey car park, located above and adjacent
SUBJECT PROPERTY
VAUXH
EL OF BEDFORD
VIA LUTON
DU
CT
A505
AIRPORT to the health club, provides a total of 686 car parking
G
YP spaces, with a mix of contract and pay and display
SY
M1
B4540 LA spaces. The health club benefits from the use of up to
150 car parking spaces. The hotel also benefits from the
B653
use of 120 car parking spaces on the top floor.
AY
TW
The state of the art health club located at ground and
OR
RP
first floor level has excellent facilities benefiting from
AI
A5
a 20m swimming pool, reception, café bar, changing
CAPABILITY
A1081
GREEN rooms, steam/sauna rooms, 2 aerobic studios, and
BUSINESS 2 large fitness rooms. The health club is arranged over
PARK
A1081 two floors with two sets of stairs and a lift linking the
10
B4540 ground and first floor.
This map is published for the convenience of identification only. Any site boundaries are indicative only and should be checked against Title Deeds
REGENT STREET | LUTON 4
TENURE PLANNING
The property is held Freehold. Planning was granted pursuant to application number & professional services (A2), and or, offices (B1 (a)) and a
98/01259/FUL dated the 23rd October 1991 for the hotel (C1), or offices (B1 (a))”.
“Demolition of existing structure & erection of
ENVIRONMENTAL
A copy of the planning consent is available upon request.
multi-storey car park with leisure development (D2) (c)
8
(d) (e) and, or, restaurant /takeaway (A3) &, or, financial
10
26
16
Environmental report and EPCs available on request.
-19
17
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28
-17
STR
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15
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64
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14–
28
27
This plan is published for the convenience of identification only. Any site boundaries are indicative only and should be checked against Title Deeds
REGENT STREET | LUTON 5
TENANCY
Hotel Car Park Health Club
The Hotel is let to Premier Inn Hotels Limited, with The Multi-Storey car park is operated by The second relates to the hotel and provides for The health club is let to Living Well Health and
a guarantee from Whitbread Group Plc for a term of Britannia Parking Limited on a 25 year lease term a rent of £58,115 per annum. Leisure Limited (now known as Bannatyne Fitness
25 years from 15th November 2013 from 25th December 2001 (12.5 years unexpired) (7) Limited company number 02497983), trading
This agreement means that the total net rental
(24.5 years unexpired). There is a tenant only break at a rent, calculated in accordance with the Lease as Bannatyne Fitness and with a guarantee from
income from Britannia is £299,497 per annum
at the 20th year. The passing rent is £480,000 per of £467,647 per annum. Rent reviews are 5 yearly Hilton Worldwide Limited (Company number
equating to 26% of the total net rental income.
to the higher of 2.5% per annum compounded, SC022163). The lease is for 25 years from
annum with an automatic increase to Both agreements increase in line with the
the increase in RPI compounded or Open 25th December 2001 (12.5 years unexpired) at a
£521,000 per annum in November 2015. The rent reviews.
Market Value. The next rent review is due on current passing rent of £287,500 per annum. Rent
income will be topped up to £521,000 per annum
the 25th December 2016. Of these payments to Britannia Parking Limited, reviews are 5 yearly to open market value, with the
by the vendor. The rent is subject to 5 yearly reviews
up to around £35,000 per annum can be recovered next due on 25th December 2016.
(first review November 2018) to the higher of the There are two coterminous agreements in place
from the health club as a service charge.
passing rent or indexed rent which is calculated at for the Landlord to pay Britannia for the use of the The property will therefore produce a total current
annual CPI, with a cap and collar at 0% and car park. The first relates to the health club and income of £1,142,997 per annum.
4% for the proceeding 5 years, from a base rent of provides for a gross rent of £110,035 per annum.
£521,000 per annum.
Unit Tenant Area Lease Terms Next Rent Rent pa Comments
(Surety) Review (psf)
Passing rent of £480,000 with a fixed increase to £521,000 pa in November
Premier Inn 2015, which our client will top up. 5 yearly reviews to the higher of the passing
25 years
Hotels Limited rent or indexed rent which is calculated at CPI, with cap and collar at 0% and
Hotel 120 rooms from 15/11/2018 £521,000
(Whitbread Group 4%. The increase is calculated adopting £521,000 as the base figure.
15/11/2013
Plc)
Tenant only break option on 15/11/2033
25 years 25/12/2016
Britannia Parking Rent reviews are 5 yearly to the higher of 2.5% pa compound, the increase in
Car Park 686 spaces from £467,647
Limited RPI or Open Market Value
25/12/2001
Bannatyne Fitness
(7) Limited (t/a 25 years
£287,500
Health Club Bannantyne’s Fitness) 33,000 sq ft from 25/12/2016 Rent reviews are 5 yearly to Open Market Value
(£8.71)
(Hilton Worldwide 25/12/2001
Limited)
Gross total £1,276,147
25 years There is a lease in place between the Vendor and Britannia Parking Limited
Landlord Lease of
from 25/12/2016 (£58,115) to lease back 120 car parking spaces for the benefit of the hotel. Further
Rights to park
15/11/2013 information available upon request
25 years
Landlord Lease of This agreement equates to £110,035 per annum. £35,000 of this is recovered
from 25/12/2016 (£75,035)
Rights to park as service charge
25/12/2001
Net total £1,142,997
REGENT STREET | LUTON 6TENANTCOVENANTS
Premier Inn Hotels Limited Britannia Parking Limited
Premier Inn Hotels Limited is rated 5A2 by Dun & Bradstreet, Britannia Parking Limited is rated 2A4 by Dun & Bradstreet. Bannatyne’s Health Clubs chain began 15 years ago and now
representing a lower than average risk of business failure. Premier Inn Founded in 1989 and owned and controlled by its Directors, the operates from over 60 clubs including the 26 clubs it acquired in
is the UK and Ireland’s largest and most recognisable hotel brand and company has seen successive years of growth and in 2012 they 2006 from Living Well/Hilton.
is dominant in the budget hotel market. Premier Inn has over returned to profitability. Britannia are now ranked as one of the
A summary of Bannatyne Fitness’ last three years’ accounts is set
660 budget hotels and over 53,000 rooms with a target to reach leading multi-storey car park operators offering national coverage.
out below:
75,000 rooms by 2018. www.britannia-parking.co.uk
Premier Inn is owned by Whitbread Group PLC, the UK’s largest Their portfolio is based around 13 multi storey car parks serving Bannatyne Fitness Limited 31 Dec 2013 31 Dec 2012 31 Dec 2011
hospitality company. large shopping developments within such diverse locations as Sales Turnover £88,792,023 £89,537,517 £89,113,405
Glasgow, Birmingham, Barnet, Milton Keynes, Ilford, Hamilton
A summary of the company’s last three years’ accounts is set out below: and Bangor. The remaining of the multi storey car parks are within
Profit / (Loss) Before Taxes £10,533,930 £4,281,433 (£16,207,279)
mixed use retail and leisure schemes in towns such as Bradford, Tangible Net Worth £48,490,791 £39,000,201 £35,222,624
Premier Inn Hotels Limited 28 Feb 2013 1 Mar 2012 3 Mar 2011
Weymouth, Bournemouth, Plymouth and Luton. Since the late
Sales Turnover £201,014,000 £124,048,000 £87,378,000 1990’s they have managed car parks on behalf of Waitrose Stores
Limited and are now their preferred car park management
Profit / (Loss) Before Taxes £44,568,000 £37,400,000 £13,651,000
company, looking after in excess of fifty of their stores. They are also Hilton Worldwide Limited
Tangible Net Worth £569,523,000 £536,522,000 £512,108,000
currently expanding a similar arrangement with Travelodge hotels
Hilton Worldwide Limited is rated 5A1 by Dun & Bradstreet
and manage a further 200 car parks nationally.
representing a minimum risk of business failure.
A summary of the company’s last three years’ accounts is set out below:
Whitbread Group Plc Hilton Worldwide is an American global hospitality company. It
is owned by the Blackstone Group, a private equity firm. As of
Britannia Parking Limited 31 Dec 2012 31 Dec 2011 31 Dec 2010
Whitbread Group Plc is rated 5A1 by Dun & Bradstreet, representing August 2012 Hilton brands encompass 3,897 hotels with over
a minimum risk of business failure. Whitbread Group Plc is the Sales Turnover £13,429,415 £16,456,376 £11,348,126 642,000 rooms in 91 countries.
UK’s largest hotel and restaurant company. It is currently a market Profit / (Loss) Before Taxes £475,050 (£78,974) (£1,396,356)
leader in the budget hotel and restaurant sectors. Its brands include Hilton is ranked as the 38th largest private company in the United
Premier Inn, Beefeater, Brewers Fayre and Costa Coffee. Whitbread Tangible Net Worth £1,823,789 £1,488,443 £1,503,006 States of America by Forbes.
Group Plc employs over 43,000 people and serves 22 million A summary of the company’s last three years’ accounts is set out below:
customers every month in its 2,500 outlets across the UK.
A summary of the company’s last three years’ accounts is set out below:
Bannatyne Fitness (7) Limited Hilton Worldwide Limited 31 Dec 2012 31 Dec 2011 31 Dec 2010
The Health Club is occupied by Bannatyne Fitness with a Sales Turnover £216,074,025 £211,350,400 £107,332,569
Whitbread Group Plc 28 Feb 2013 1 Mar 2012 3 Mar 2011 guarantee to Hilton Worldwide Limited. Profit / (Loss) Before Taxes (£11,794,979) (£32,062,372) (£579,230)
Sales Turnover £2,030,000,000 £1,778,000,000 £1,599,600,000
Bannatyne Fitness is rated 5A1 by Dun & Bradstreet, representing Tangible Net Worth £641,223,855 £653,428,502 £684,129,439
Profit / (Loss) Before Taxes £337,700,000 £300,500,000 £268,300,000 a minimum risk of business failure. They are the UK’s largest
independent health club operator, with 61 clubs across England
Tangible Net Worth £1,181,100,000 £888,300,000 £763,000,000
Scotland and Wales.
REGENT STREET | LUTON 7PROPOSAL VAT
The property is elected for VAT.
Our client is seeking offers in excess of £15,440,000 (Fifteen Million Four Hundred and Forty
Thousand Pounds), subject to contract and exclusive of VAT, reflecting an attractive net
initial yield of 7.00% after purchaser’s costs of 5.80%.
Net Initial Yield
7.00%
CONTACT
Passing Rent £1,142,997 per annum For further information please contact:
Reversionary Yield 2016*
Total Rent: £1,217,626 per annum
7.45% Edward George
D: 020 7312 7489
Reversionary Yield 2018* E: edward.george@montagu-evans.co.uk
7.80%
Total Rent: £1,271,852 per annum
Equivalent Yield 7.70%
Mark Girling
D: 020 7312 7460
E: mark.girling@montagu-evans.co.uk
* Running yield assumes 3% fixed growth on Britannia and 2% CPI growth on Premier Inn.
Nick Richardson
D: 020 7312 7420
E: nick.richardson@montagu-evans.co.uk
Tony Rowbotham
D: 01481 742280
E: tony.rowbotham@montagu-evansci.com
5 Bolton Street, London, W1J 8BA
www.montagu-evans.co.uk
Misrepresentation Act 1967
Montagu Evans LLP for themselves and for the vendors or lessors of this property whose agents they are,
give notice that:
(i) The particulars are set out as a general guideline only for the guidance of intending purchasers or
lessees and do not constitute the whole or any part of an offer or contract. (ii) All descriptions, dimensions,
references to condition and necessary permissions of the use and occupation, and other details are
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. (iii) Neither Montagu Evans LLP nor their employees has
any authority to make or give any representation or warranties whatsoever in relation to the property
(iv) 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. (v) All the plans and maps
provided within the particulars are for identification purposes only.
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