christie & co business outlook 2014

8/13/2019 Christie & Co Business Outlook 2014

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Business Outlook 2014 03


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04 christiecorporate.com


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UK BIRMINGHAMBRISTOLCARDIFFEDINBURGHEXETERGLASGOW IPSWICHLEEDSLONDONMAIDSTONEMANCHESTERNEWCASTLE

NOTTINGHAM WINCHESTERLONDON - HEAD OFFICE

INTERNATIONALLONDONBARCELONABERLINBORDEAUX DUBLIN

FRANKFURTHELSINKILYONMARSEILLESMUNICHPARISRENNES

VIENNA WARSAW



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Our assertion last year that we were at the bottom of thevalue trough but that opportunities to acquire businesseswere still present, was vindicated in 2013. In future years,business owners and entrepreneurs will look back at thisperiod as being a cyclically outstanding opportunity foracquiring well-priced assets.

David Rugg,Chairman



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Christie + Cos track record of best-in-class deal-making, combined with theconsultancy and advisory expertise wevebuilt in our near-80-year history, will see uswell positioned to meet the needs of clients,both at home and internationally, in the morepositive times that surely lie ahead.



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HotelsMovement in average prices year on year in per cent

5.76.1

-18.4 -19.5

0.1 -5.1 -3.1

20132007 2008 2009 2010 2011 2012

PubsMovement in average prices year on year in per cent

3.36.5

-11.6-20.1

-0.9 -1.1 -3.3

20132007 2008 2009 2010 2011 2012

RestaurantsMovement in average prices year on year in per cent

4.78.0

-14.9 -18.1 4.6 -4.1 -1.4

20132007 2008 2009 2010 2011 2012

CareMovement in average prices year on year in per cent

-1.112.2 -16.9 -11.0 0.4 -3.3 -0.7

20132007 2008 2009 2010 2011 2012

RetailMovement in average prices year on year in per cent

-1.05.6

-6.5

-9.8

2.1 -3.6 -0.9

20132007 2008 2009 2010 2011 2012



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While the leisure, healthcare and retail sectors have gonethrough a period of stabilisation, the winners and losersfrom the past years of recession have still to fully emerge.There will be greater consolidation to come across all sectorsand, particularly where operators have allowed the capextimebomb to explode without investment intervention,

some further distress.Andreas Scriven,Director and Headof Consultancy

Winners, losers and the capex-timebombWhile the leisure, healthcare and retail sectors have gonethrough a period of stabilisation, the winners and losers fromthe past years of recession have still to fully emerge. Therewill be greater consolidation to come across all sectors and,particularly where operators have not diffused the capextimebomb through appropriate investment intervention, somefurther distress.

Certain assets, especially in the leisure eld, will becomeoperationally obsolete given their tertiary locations and, inmany cases, inconsistent product offering. Those that haveinvested and innovated through the recession are likely to beamong the winners.

What appears to be getting lost in the increasingly optimisticdiscussions of what 2014 may hold is the fact that a materialnumber of business owners are still likely to face potentialenforcement either from their incumbent bank or, morelikely, from the opportunity funds who have acquired a debtposition in their business.

Some business operators are uncomfortable with steadyand stable growth, preferring to operate at the extremes, andit will be the deal chasers that risk being the losers withoutrecourse to expert advice the like of which is offered by

Christie + Cos consultancy offering.

Looking to Europe

As London preserves its status as the global city,opportunities for private equity, pension funds and high networth individuals to invest will diminish. As such, many willstart to look at the recovering markets in continental Europe such as Spain, Portugal and Italy. And just as in the UK, thoselooking to Europe will need the same level of expert adviceand counsel.

What our proposition offers is the experience of Europeanmarkets, particularly in leisure and care, and especially inmarkets like Spain where legislation and business practicescan be opaque. Workable comparisons with other markets,identifying those practical solutions that work,

and highlighting how investors need to adapt for localenvironments transactional and legal, for example are allessential elements of the investment process.

And all of which demand the very best of advice.

Christie + Cos Consultancy team has developed a newregular communications platform, including informative andinuential market reports the rst of which, on the top ve

European airport hotel markets was published recently. Forfurther information, see www.christiecorporate.com

European AirportHubs In Perspective

January 2014

Q

Q

Q



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The second half of 2013 was positively frenetic in termsof M&A activity and portfolio valuation work, comparedwith 2012, driven by a much improved economic environment,increased condence amongst both buyers and vendors,and the selling off of non-performing loan (NPL) portfoliosby the banks. Working through these loan disposals in

the rst quarter of 2014 will result in increasingtransactional activity.

Darren Bond,Director and Headof Valuation Services

Ongoing bank deleveraging will boost activity in 2014When 2013 dawned in much the same subdued way as 2012closed, with a lack of M&A activity and portfolio valuationwork, we originally looked forward to a second consecutiverelatively at year.

However, the second half of 2013 was positively freneticby comparison, driven by a much improved economicenvironment, increased condence amongst both buyers andvendors across all the sectors in which Christie + Co works,and the selling off of non-performing loan (NPL) portfoliosby the banks. As part of ongoing bank deleveraging, we areseeing a continuation of banks revisiting their security andinstructing property valuations, as they continue to strengthentheir balance sheets.

While it is difcult at the time of writing to prove how theNPLs are driving activity, it is beyond doubt that the workingthrough of these loan disposals in the rst quarter of 2014 willresult in increasing transactional activity through the middleperiod of the year.

Distress reduced but pricing buoyed

Activity was undermined, for a second year in turn, by ashortage of good quality stock to the market. Distress may

have been reduced, but this was more or less driven byowners hanging on to assets in order to see out the nalstages of the recession.

The shortage of transactions at the quality end of thespectrum made valuation a difcult task when higher qualitystock did come to the market. A distinct lack of comparablesales of better quality, performing assets has been boostedby a return to competitive bidding which has started to buoypricing.

Trading performance has been fairly at across the board,except where operators and owners have invested in capitalexpenditure there were real performance advantages forthose that did invest. In general, the drivers of businessvaluation revenue, prot and EBITDA remained underpressure.

Investment focus welcomed

Encouragingly, in 2013, we saw many more of our clientsunderstand the need to invest in their properties albeitwell after the capex timebomb had gone off. The economicdownturn had seen many businesses starved of capitalexpenditure so one hopes this trend towards 11th hourinvestment is not too late. Those that have invested too lateor not at all will nd themselves on the receiving end of asecond hit from the recession.

This leaves a question for valuers as to how to factor futurecapex investment into a valuation today. How do we valuethis promissory investment? Valuers will need to take aproactive approach to this as we inch towards the recovery.

Generally, the upturn in the economy leaves us optimistic forthis year and beyond. Trading performance should improve

across the board, as should the transactional market if themarginal improvements in pipelines are to be trusted. Wehave experienced glimpses of green shoots in recent years,but at long last, there appears to be genuine hope of astrengthening recovery.


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Despite recovery, decline in distress may only betemporary

The decline in business distress and in businesses beingsold out of distress continued in 2013 as an inevitableconsequence of the continuing economic recovery andthe subsequent maintenance, if not increase, in consumerspending.

However, the spectre of the fall-out from interest rate swapmis-selling, a tougher approach by banks seeking to disposeof bad bank debt, including non-performing loan portfolios combined with distress caused by the recovery itself, assome businesses nd it challenging to raise nance forworking capital due to increased consumer demand meansthat we may see a spike in distress cases before the level ofdistress declines to pre-recessionary levels.

A number of scenarios would have to coincide for us to becertain of this.

Completed swap sales reviews will drive sales

Weve only just touched the tip of the iceberg with interestrate swaps. As at 28 November 2013 only 2,359 sales of18,395 loans assessed as non-sophisticated were at the

redress offer and acceptance stage ie, an initial redressoutcome had been communicated to the customer.

Results for the remainder of 2013 and the rst half of2014 should see this gather pace and compensationswill be agreed and paid. Some cases under review willinevitably result in exit strategies through administrations,receiverships and some consensual sale activity.

Banks will get tougher on some customers and will begin tomove aged cases on despite the Tomlinson Report and thesubsequent media furore, this is a legitimate strategy whichwill stimulate activity, provide funding for fresh investment andallow businesses to continue to function under new, viable,ownership. The level of the banks toughness, however,will be a determining factor in whether there will be greateractivity in the distressed marketplace.

Rates could see some fall off the perch

Interest rates will, of course, be a vital inuence on thedistressed market. In his forward guidance in summer2013, Bank of England Governor Mark Carney assertedthat the Bank would not consider raising interest rates untilunemployment fell to seven per cent, which he stated mighttake three years.

Since then, growth has picked up speed and unemploymenthas fallen faster than the Bank expected. The gatheringrecovery has raised the prospect of interest rates risingsooner than late 2016 with some forecasting a rate risein early 2015. If that transpires, we may well see manycompanies fall off the perch.



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19% Hotels

61% Pubs

1% Restaurants

4% Leisure

10% Care

5% Retail

Business distress - IDistressed assets as a percentage of all assets instructed for disposal

0

5

10

15

20

25

2009 2010 2011 2012 2013

8

16

24

22

15

Business distress - IIDistessed assets instructed for disposal by sector in 2013


While 2013 saw a decline in business distress andbusinesses being sold out of distress, we may see a furtherspike in cases in 2014 before the level of distress declinesto pre-recession levels. How banks deal with aged distresscases, plus the prospect of an increase in interest rates in

2015, will be determining factors in whether morecompanies fall off the perch.Stephen Jacobs,

Director, Bank Support &Business Recovery


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There is still fervent demand from thosewith cash to invest in the UK hotelsector. This, and the improvingeconomic situation, should see thepotential for selective hotel valueincreases, both in and outside of

London in 2014, even if the tradingmarket remains in a fairly at position.

HotelsMovement in average prices year on year in per cent

5.76.1

-18.4 -19.5

0.1 -5.1 -3.1

20132007 2008 2009 2010 2011 2012



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number of hotel inspections conducted for

sale or valuation purposes in 2013

average number of offers per hotel sold byChristie + Co in 2013

number of new hotel instructions receivedby Christie + Co in 2013

948

5.2

267

Market predictions 2014



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Despite a difcult economic situation France remainsEuropes number one destination

With 38 UNESCO-listed World Heritage sites, France remainsEuropes number one destination with 83 million tourists ayear. Hotel occupancy rates have been strongly supported byinternational visitors (up 7.2%*) while internal visitor numbersremained relatively stable (down 0.4%*).

With 33.2 per cent of jobs set in the tourism sector, Paris andits suburbs increasingly present a different market from otherparts of the country. Indeed, the difcult economic situationhas seen many small companies in the country suffer, withcorporate clientele under pressure. On the contrary, Pariscontinues to attract new visitors from the BRICS.

Paris stands tall

Hotel buyers and sellers remain aware of the long-termopportunities to be had in Paris. Key individual buyers havesold some of their assets in other parts of the country inorder to invest in the capital city. Investment funds have takensimilar decisions and several main portfolios have been soldor sales processes are on-going.

Freehold opportunities are rare due to the fact that sellers

are happy to retain the bricks and mortar for the present.Nonetheless, the market seems to support multiplesof around 18 to 20-times EBITDA. Several examples ofoverpriced assets, however, remain unsold on the market.

Leaseholds are also capped to ve-times the turnover ifbuildings are in reasonable condition.

Trophy assets, hotels with over 100-rooms, or in toplocations are outside of the scope of this due to the fact thatseveral international key players are looking for investmentopportunities.

The market is taxingThe market has been depressed by the new levels of capitalgain taxes (up to 64.5%) for directly-owned assets. Christie+ Cos French team saw cases where owners stopped thesales process for tax reasons when offers were over askingprice. For the second year new tax regulations have beenimplemented with negative effects, freezing the market.

Also for tax reasons, legal holding structures have to reinvestcapital gains in order to keep their tax niches, and the markethas been supported by portfolio transactions, such as theRezidor portfolio (a process managed by Christie + Co).Newcomers, having sold companies in other sectors, are alsoshowing an interest in investing in the hotel sector.

Due to the high proportion of budget assets on the market inthe regions, there are a number of investment opportunitiesavailable which offer returns on investment of between 15 and20 per cent.

*in July & August in terms of room nights based on the (DGCIS) survey



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German hotel market remains positiveIn 2013 the productivity of Germanys key hotel marketscontinued with the positive development it rst demonstratedin 2010. The key winning markets were once again found inHamburg, Munich and Frankfurt, with these cities performing15-32 per cent above the European RevPAR average.

This positive development was mirrored in transactionvolumes. The reported volume reached up to 925m(to September 2013) and with a deal pipeline in the regionof a further 300 to 500m until year end, the total volumeshould reach the same level of 1.3bn as in 2012 (basis:deals over 10m).

Christie + Cos contribution to the result of the rst sixmonths amounted to an amazing 50 per cent, with the maindrivers for this being the successfully completed sale of theGerman Queens Portfolio to Fattal Hotels and other singleasset or group sales such as the package of two Park Plazahotels in Berlin.

Who is buying?

Money is cheap but many banks remain reluctant when itcomes to hotel nancing. Consequently, cash-rich buyers such as high net worth individuals, private placements andprivate equity with good contacts to their lending desks are in the drivers seat. However, it has been observed thatloans-to-value are not that stiff anymore which could meanpositive news for 2014.

Whats next?

At least two spectacular portfolio transactions are bubblingunder the surface and are expected to complete in therst half of 2014. One is Christie + Cos co-instruction with

Goldman Sachs regarding the sale of the Interhotel portfolioin the east of Germany. This scale of deal will fuel transactionvolumes in 2014.

Poland: Activity driven by investment transactionsIn 2013 Polish hotels in the main cities experienced a higheroccupancy but unfortunately lower average daily rate. Someiconic hotels opened including Double Tree by Hilton in Ldz,Mera Hotel & Spa in Sopot, Sound Garden Hotel in Warsawand Puro Hotel in Krakw.

Signicant hotel transactions were thin on the ground,however the Sheraton Krakw did come to the market.

It is likely that 2014 will be a less active year in newdevelopments and more active in terms of investmenttransactions in Poland. Due to the asset-light strategy of hotel

chains there may be opportunities for sale and management/franchise-back transactions.

Equally likely is that the potential buyers will be opportunisticfunds and high net worth individuals from Poland and Russia.



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Single asset transactions will continue to dominateWhile 2012 ended with a brilliant result for the Austrian hotelinvestment market, partly due to a large portfolio transactionat year end, 2013 began at a somewhat slower pace.

In the rst half of the year, hotel properties with a total volumeof approximately 135 million changed owners, which was inline with the rst half of 2012.

The Austrian hotel investment market in 2013 wascharacterised by several single asset transactions. Examplesinclude the sale of Austria Trend Hotel beim Theresianum,MGallery Hotel, the Hilton Danube and the Motel One

development at Viennas new Central train station.Buyers were mainly nancially-sound funds and smaller realestate companies or developers. As in recent years we alsosaw several Eastern European and Russian buyers acquiringhotels in Vienna, which once again led the way in terms oftransactions.

There was also some activity in provincial capitals such asLinz and Salzburg, where the Austria Trend Hotel SchillerparkLinz and the Amedia Hotel Salzburg, respectively, weresold. Both hotels were acquired by Austrian high net worthindividuals.

Across the Eastern borders, investors also showed renewedinterest in the CEE hotel market. The volume of hotelinvestment activity in 2013 in this region increased by 38 percent in the rst half of the year compared to the same periodin 2012. Most of the activity was in Poland.

Investors expectations have not really changed over recentyears, concentrating on quality and upside potential. WhilePoland is still seen as the key investment market withinthe region, investors also are turning back to prime hotelproperties in Prague and Budapest.

As noted, the most notable transactions in the Centraland Eastern European hotel market included the sales ofthe Hotel Bristol in Warsaw, the Sheraton Krakow, and theMercure hotel Kasprowy in Zakopane. Outside Poland,the Hilton Soa and the Hilton Palace in Prague were alsonotable deals.

Vienna set to lead the way again

The year ahead is likely to bring further condence that dealscan be done, both in Austria and in Central and EasternEurope, due to the banks and receivers exit strategies.

In our opinion there will also be more transactions in Austria,with Vienna again leading the way in terms of transactions,as in previous years.

Many investors will also remain on the hunt for attractiveinvestment opportunities in the Danube metropolis.



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Positive forecast for Nordic regions despite relatively attrading

The relatively strong performance of the Finnish hotel marketcontinues despite the nationwide slowing occupancy growthand minor decline in average room rates (ARR).

The Helsinki metropolitan region has absorbed recent roomsupply increases and maintains good level of occupancy andalmost at room rate performance during 2013.

The recent announcement of a large investment programmeat Helsinki-Vantaa Airport, the increasing number ofdirect ights to Far Eastern destinations and continuously

developing business parks around the airport, have createdan attractive base for hotel operations in Vantaa.

As a result, there are a handful of new hotel developmentsin the pipeline. Equally, there is increasing interest amonginternational operators to gain a presence in Helsinki whereseveral new hotels are planned. A recently announced newbrand entering Finland is Indigo, which has secured a primelocation on Bulevardi and is expected to open in early 2015.

The overall outlook for the Finnish market remains positivedespite persisting economic uncertainties and increasinglyweak export forecasts. Growth expectations are fuelledby increasing visitation from Russia and the Far East andgradually improving ARR.

Nordic capitals perform well

Despite the rather pessimistic outlook for the Nordic capitalcities at the beginning of the year, these hotel marketsperformed rather well in 2013.

In particular, the Copenhagen market recorded substantialRevPAR growth compared to 2012 by the end of Q3, fuelledby better-than-expected occupancy levels.

The Stockholm hotel market persisted despite the weaktrading environment and consistently yields the highestaverage room rates and RevPAR amongst the Nordic capitals.

Meanwhile, Oslo hotel performance remains at compared to2012 with only marginal ination adjusted RevPAR growth.

Positive pipelines

All three cities have substantial hotel development pipelinewith over 1,600 rooms in Stockholm, over 1,000 inCopenhagen and some 600 in Oslo. This is likely to have anegative impact on short-term trading levels.



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Market prospects set to improve after turbulent yearsBanks continued to hold a substantial amount of hotel-relateddebt on their books in Ireland in 2013. Following manyreceivership announcements in 2012 and the early part of2013, the focus for many lenders shifted to renancing andsupporting future value recovery in tandem with the marketrecovery.

For the 100-plus Irish hotels that went into receivership duringthe downturn, a number have been, and continue to be, sold.

Although many more remain in a hold position, the route tomarket is in sight.

Transactions bring new pricing base

After a prolonged ebb in the hotel transactional market, 2012saw a number of hotels being brought to market, followed bymany more in 2013. With these transactions, a new pricingbase is shaping one which is no longer based on alternativeuse, tax incentives or land value as was the case during thepeak. Following the trend of 2012, the commonality in 2013was that virtually all hotels being brought to market weremarked as distressed.

Major deals recorded in 2013 included the 66-room Sheen

Falls Lodge for 5m, the former Ormonde Quay Hotel for 2.5m, the 83-room Ashford Castle for 20m, the 123-roomFota Island for 20m, the 195-room Trinity Capital Hotel for 35m and Irelands largest hotel at Citywest for 30m.

International investors have emerged as the most commonbuyers for transactions over 4m, with the exception ofthe Radisson Blu Cork which sold for 8m to Irish set upiNua Hospitality.

Hotel transactions outside the capital have unveiledconsiderably low prices, due mainly to a weakness intrading and limited availability of bank debt, with loanscalculated on an EBITDA multiple rather than the historicallyreliable loan-to-value ratio.

Throughout the downturn, new supply announcements havebeen weak. However reports of continued inward investmentand expansion of the ITC sector in Dublin, coupled with thestrength of Convention Centre Dublin (CCD) and remarkablyhigh occupancies in the city, suggest a requirement forcontinued evolution of hotel supply. Outside Dublin, somelocations continue to absorb supply which entered during theboom years, and there are few locations where a requirementfor new supply is evident.

Professional advice to market entrants

Christie + Cos Dublin ofce recorded a busy 2013, as manyhotels and non-performing loan portfolios which includedhotel real estate, came to market. Christie + Cos advisoryteam was called in to provide advice to private equity housesand investment funds looking to enter the Irish market, eithervia straight property acquisitions or loan acquisitions.

Meanwhile, Christie + Cos valuations team provided advicefor the purpose of renancing deals which had becomeconsiderably more accessible than they had been inprevious years.

Future prospects

2014 is likely to bring further condence that deals canbe done. Dublin remains at the forefront of the minds ofinvestors, however as trading performance picks up aroundthe country, other locations will continue to interest selectiveinvestors. Dublin city is no longer showing evidence of oversupply and new hotel development would be a welcomeaddition to the citys tourism infrastructure and economy.



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More sold pubs remaining as pubsthan ever before, plus the continuingtrend towards the acquisition ofpubs by experienced operators andentrepreneurs returning to the sector,leaves us condent that the pub sector

is in as healthy a position as it hasbeen for many a long year.

Neil Morgan,Director and Head of Pubs

PubsMovement in average prices year on year in per cent

3.36.5

-11.6-20.1

-0.9 -1.1 -3.3

20132007 2008 2009 2010 2011 2012



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percentage of pubs sold by Christie + Co in 2013

remaining as pubs

percentage increase in pubs sold remainingas pubs

number of viewings of pubs marketed byChristie + Co in 2013

67%

5%

3553




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RESTAURANTS


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While the London restaurant sceneshone once again in 2013, there ismore than a glimmer of hope that thisenthusiasm for the sector is going to bereplicated throughout the country in theyear ahead. Brands will thrive, but brand-

less, imageless and dated traditionalrestaurant concepts may nd themselvesunder yet further pressure in 2014.

Simon Chaplin,Director andHead of Restaurants

RestaurantsMovement in average prices year on year in per cent

4.78.0

-14.9 -18.1 4.6 -4.1 -1.4

20132007 2008 2009 2010 2011 2012



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percentage increase in restaurants sold by

Christie + Co in 2013

number of viewings of restaurants marketed byChristie + Co in 2013

average number of offers per restaurant sold byChristie + Co in 2013

14.8%

899

3.7



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The inuence of private equity in the leisure sector was once againto the fore in 2013. Looking ahead,London will continue to be the focusof leisure and hospitality investment,while the ongoing restructuring of

distressed banks will continue to offera variety of renance and acquisitionopportunities for operators andopportunity funds alike.

Jon Patrick,Director and Head of Leisure



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CARE


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average number of offers per care business sold

by Christie + Co in 2013

number of viewings of care homes marketed for saleby Christie + Co in 2013

number of care home inspections conducted for saleor valuation purposes in 2013

4.8

1619

1062



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While there was clear evidence ofincreased operational challenges, thenursery sector continued to attractsuitors, resulting in very competitivetransactional activity. In 2014, banks,investors and buyers will increasingly seevalue outside of the major conurbationsand regional groups will use theopportunity to expand.

Courteney Donaldson,Director of Childcare

Regions will drive activity in 2014

Not least of the local authorities problems is the requirementfor them to deliver 260,000 new and sustainable two-year-oldplaces by September 2014.

Many operators, were hindered by Ofsteds continuingstruggles with inspections compounded, it must be said bythe increase in the number of complaint-led inspections towhich their energies were devoted and for many operatorsissues with the inspection process, teamed with changesin Ofsted inspection outcomes and implications thereof,compromised many providers attempts to operate coherentlyand effectively.

In education, there was also some major deal activity in 2013,not least August Equitys acquisition of Eton Square Schools.

Elsewhere, independent schools did continue to struggle, butthere was no great increase in distress in the sector.

As we look forward to 2014, activity across the majortransactional market will take a back seat as activity,especially in the nursery arena, will become more regionallydriven. Banks, investors and buyers will increasingly seevalue outside of the major conurbations and regionalgroups will use the opportunity to expand. There willundoubtedly be an increase in regional nursery groups,and owners of high quality single asset nurseries, being inreceipt of direct approaches from prospective buyers. Withsuch buyers seeking to agree deals via off-market, non-

competitive discussions, we would urge all participants in thetransactional marketplace to seek the best available expertadvice, thus ensuring that the best possible deal terms, andprice are secured.



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RETAIL


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The rise of the discount operator, themarch of the supermarkets into highstreet small format operations, thecontinuing demise of the high streetand doubts about fuel resilience allexercised our minds in 2013. The year

ahead promises more of the same butindependent retailers looking for optionson the high street or the forecourt arenawill not be lacking in opportunity.

Steve Rodell,Director and Head of Retail

RetailMovement in average prices year on year in per cent

-1.05.6

-6.5

-9.8

2.1 -3.6 -0.9

20132007 2008 2009 2010 2011 2012



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average number of offers per retail business sold by

Christie + Co in 2013

number of viewings of retail businesses marketed forsale by Christie + Co in 2013

number of retail business inspections conducted forsale or valuation purposes in 2013

6.4

2527

1619



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MEDICAL


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Pharmacies, dental and GP practicesall remained in high demand in 2013while supply continued to be relatively

scarce. Values and average prices forthose units that were placed on themarket, particularly those of a higherquality, were forced up as corporatesand private investors came upagainst a strong and determinedindependent market.

Simon Hughes,Director and Head of Medical



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average number of offers per medical business soldby Christie + Co in 2013

percentage increase in medical businesses sold byChristie + Co in 2013

number of medical businesses inspections conductedfor sale or valuation purposes in 2013

6.5

323%

420Market predictions 2014



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Date Vendor Purchaser Deal

February Apex Hotels Standard Life Acquisition of 179-room Apex Hotel for 18.625m

March InterContinentalHotels Group

Constellation Hotels Group Acquisition of the 447-room Intercontinental Park Lane for 250m

April Isseyegh family Thornstone Developers Acquisition of 31-bed Westland Hotel, Bayswater for 18m

July Canada Life Condential Acquisition of 144-bed Metropolitan by COMO Hotel in Old ParkLane for an undisclosed sum

August Berkeley Homes Standard Life Acquisition of the 250-room Premier Inn Goodmans Field for 39m

Joint LPA ReceiversJon Cookson &Richard Compton

Henderson Global Investors Acquisition of the 408-room Travelodge Royal Scot Hotel for54.1m

September Residential Land Felda Investment Corp Acquisition of 198 Grand Plaza serviced apartments for 98m

Messrs Mazabi andHenzada

Grecian Hotels Acquisition of 90-room Abba Hotel in Queens Gate for 40m

September Marriott Hotels(in administration)

Abu Dhabi Investment Authority

Acquisition of 42 hotels in administration from RBS for reported700m

March Hotel du Vin/Malmaison KSL Capital Partners Acquisition of 27 hotels for a reported 200m

Prinicpal Hayley Starwood Capital 23 city centre hotels, conference and training venues acquired for360m

November Menzies Hotels(in administration)

Topland Group 12 hotels acquired out of administration for 86m

January De Vere Group Westmont Hospitality Acquisition of De Vere Grand Harbour Hotel in Southampton for18m

February Apex Hotels CBRE Global Investors Acquisition of Apex Hotel Edinburgh for 10m

March Administrators Westmont Hospitality Acquisition of Marriott Victoria & Albert in Manchester for 15m

May Menzies Hotels Britannia Hotels Acquisition of Travelodge Edinburgh West End Hotel for 6.5m

Menzies Hotels La Salle InvestmentManagement

Acquisition of Travelodge Bath Waterside Hotel for 11.2m

August Cerberus The Cowell Group Acquisition of Hilton Garden Inn Hotel in Luton for 7.8m

Edward Woya Tonstate Acquisition of Cardiff Hilton for 13m

Axa Real Estate Reef Estates Acquisition of Premier Inn Winchester for 9.2m

English Cities Fund La Salle InvestmentManagement

Acquisition of Premier Inn Salford Central for 12.5m

September Simon Lowe Hand Picked Hotels Acquisition of Fawsley Hall in Northamptonshire for 10.5m

October Lioncourt Capital Undisclosed Acquisition of Ramada Plaza Gatwick for 7.2m

HOTELS

HOTELS PORTFOLIO

HOTELS INDIVIDUAL ASSETS



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January Admiral Taverns (LBG) Cerberus CapitalManagement

1,100 tenanted by pubco acquired from Lloyds Banking Group for200m

Real Beer Company St Austell Brewery Acquisition of specialist drinks wholesale company

April Bramwell/ Marstons/Star Pubs & Bars

Amber Taverns Acquisition of four pubs two from Bramwell, one each fromMarstons and Star Pubs & Bars

May Peel Hunt City Pub Company Acquisition of two freehold London pubs in a deal reportedly justunder 3m

Marstons Legal & General Property Sale and leaseback of 27 new build pubs in a deal reportedly justunder 70m

August Premium Bars &Restaurants

Stonegate Acquisition of 13 Living Room sites for a reported 10m

October Convivial LondonPubs plc

Mitchells & Butlers Acquisition of four pubs for reported 13.3m

November Bramwell Pub Company(in administration)

Stonegate Pub Company Acquisition out of administration of 78 pubs for reportedconsideration of 35m

Marstons New River Retail Acquisition of 202 pubs for 90m

December Head of Steam Camerons Brewery Acquisition of seven strong Head of Steam group by Camerons

Bramwell Pub Company(in administration)

Various 51/67 remaining public houses


March Giraffe Tesco 47-site family based chain acquired by Tesco for 48m

Paul Patisserie Valerie Luke Johnson backed chain takes seven sites in London stationspreviously operated by Paul

Langans Restaurants Various Langans close three sites to concentrate on agship LangansBrasserie. Buyers include Cte

April Imbida Partnership Bowmark Capital Jillian MacLean, backed by Bowmark Capital, bought out theLondon-based chain Drake & Morgan for 30m

D&D Restaurants Conran Holdings/CairdCapital

50 million management buyout of premium restaurant group D&DLondon, which owns over 30 restaurants in London, Leeds, Paris,New York, Istanbul and Tokyo

Osterio Mauro, Cheshire The Restaurant Group Further site acquired for TRGs Brunning & Price chain whichbecome the Bull at Mottram

July Spirit Pub Company TRG & TFI Fridays The Restaurant Group and TGI Friday acquire sites in the RiversideLeisure Park Norwich

August Little Chef Kouts Food Group 81 remaining Little Chef sites sold for 15m to Middle Easternbacked food operator

September Cte CBPE 45 sites. Private equity backing 100m management buyout

October Gondola Hutton Collins Private investment rm buys the 35 strong Byron Burger chain for100m

November Travelodge EuroGarages Last one of 11 former Little Chef sites acquired by EuroGarages forStarbucks franchise

December Travelodge McDonalds Former Little Chef site in Dunchurch acquired by McDonalds for anew build drive-through restaurant

PUBS

RESTAURANTS



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January X-Leisure Unit Trust Land Securities Land Securities acquired majority interest in X-Leisure Unit Trustand 100% interest in X-Leisure Ltd for 111.9m

February Team Sport MBO 9m MBO led by Dominic Gaynor and backed by ConnectionCapital

March Gala Coral Group Rank Group Acquisition of 19 casinos

May Pure Gym CCMP Partners Acquisition for undisclosed sum

June Vue Cinemas AIMCo & OMERS Acquisition of 146-site cinema chain for 935m by private equityarm of Canadian pension funds

Atmosphere Bars &Clubs

Chicago Group Acquisition of ten former Atmosphere Bars & Clubs sites

Gym Group Phoenix Equity Partners Acquisition valuing the Gym group at 90m

September London & Regional/Caird Capital

TDR Capital Acquisition of David Lloyd Leisure in a deal for a reported 750m

November Graphite Capital Caledonia Investments Acquisition of Park Holidays UK for 172m

Odeon PropertyGroup LLP

LondonMetric Property plc Acquisition of ten out-of-town Odeon multiplexes for 80.6m


January Sunrise Senior Living Health Care REIT Completed acquisition of Sunrise Senior Living by Health CareREIT for $3.4bn. International portfolio included ve UK assets

March Independent LivingGroup

Voyage Acquisition of portfolio of 28 homes for an undisclosed sum

Ideal Homes Target Healthcare REIT Acquisition of four Ideal Homes for reported consideration of 18m

July Myriad Healthcare Ltd Grifns American REIT II Sale of property portfolio by Myriad for reported 298.5m

August Choice Care Caledonia Investments Acquisition of Choice Care by Caledonia Investments for reportedconsideration of 86m

Richmond Care Villages Bupa Acquisition of Richmond Care Villages by Bupa for an undisclosedsum

September Barchester Healthcare Ravenshill International Ltd Sale and leaseback enabling repayment of 1.48bn debt

Castlebeck Danshell Acquisition of Castlebeck by Danshell for a reported considerationof 35m

November Optimum Care Four Seasons Health Care Acquisition of Optimum Care (operating as Avery) by FSHC for anundisclosed sum

LEISURE

CARE



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January Compass Services August Equity LLP Acquisition of fostering group for an undisclosed sum

i-graduate Tribal Group Acquisition of educational benchmarking and analytics group fortotal reported consideration of 7.5m

March Educomp Solut ions Investors led by GPE India Sale of entire 50% stake in Eurokids International Mumbai-basedpre-school franchiser for an undisclosed sum

April Bregal Capital KKR Sale of 49% stake in Cognita schools (UK and international) toprivate equity rm for an undisclosed sum

kidsunlimited Bright Horizons Acquisition of the 64-setting portfolio for a reported 45m

June Sovereign Capital Nord Anglia Education Acquisition of 11 international schools of World Class Learning(WCL) Group for an undisclosed sum

July Minerva Education August Equity Acquisition of Eaton Square School Group and Ravenstone Schoolfor an undisclosed sum

October Busy Bees Group Ontario Teachers PensionFund

Acqusition of majority shareholding in Busy Bees Group operatorof 213 nurseries in a deal reported to be 220m


January Exxon MobilCorporation (Esso)

Euro Garages 45 petrol stations across the North and Wales acquired by EuroGarages

February Costcutter/Palmer & Harvey

Costcutter/Palmer & Harvey

Joint venture established with a combined turnover of around 5billion from the supply of c.2,500 symbol stores

July Alfred Jones One Stop Stores 33 convenience stores acquired by One Stop

August Scotmid/Penrith

Co-operative Society

Scotmid/Penrith

Co-operative Society

The two societies merged taking Scotmid into England for the rst

time. Penrith has nine stores in Cumbria and County Durham.

Lawrence Garages Petrogas UK Two Sites leased to Petrogas at Norwich and Drayton

The Co-Operative Group Petrogas UK 12 leasehold sites acquired from the Co-operative Group

Murco Patron Capital Investment sale of 54 former Petrol Express sites let to Murco in adeal reported to be worth over 50 million

November Marstons PLC New River Retail 200 pub sites sold by Marstons to specialist retail developer NewRiver Retail with many expected to be converted into c-stores.

December Midlands Co-operativeSociety/AngliaCo-operative Society

Midlands Co-operativeSociety/Anglia Co-operativeSociety

The two societies merged in Dec 2013 resulting in an estate of227 food stores in 16 counties across the Midlands and East ofEngland


April

July

Medex Healthcare

Safehands Healthcare

ABC Pharmacy

MedicX Pharmacy

Acquisition of portfolio of ve pharmacies in the West Midlands

Acquisition of ve pharmacies in north-west of England, trading asHall & Stevens, for an undisclosed sum

August Peter Burnett Avicenna Ltd Acquisition of Bearwood Pharmacy, West Howe Pharmacy andTalbot Pharmacy in south of England for 2.05m

September CSPC Ltd Day Lewis Ltd Acquisition of Bay Pharmacy & Quay Pharmacy for 1.3m

October G & EJ Morris Ltd A & JM Sheppard Ltd Acquisition of three community pharmacies in mid-Glamorgan foran undisclosed sum

CHILDCARE

RETAIL

MEDICAL



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christie & co business outlook 2014

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