victoria road, farnborough, gu14 7pg...victoria road, farnborough, gu14 7pg well secured, long...

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Victoria Road, Farnborough, GU14 7PG WELL SECURED, LONG LEASEHOLD, LEISURE INVESTMENT LET TO JD WETHERSPOON & PAPA JOHNS

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Page 1: Victoria Road, Farnborough, GU14 7PG...Victoria Road, Farnborough, GU14 7PG WELL SECURED, LONG LEASEHOLD, LEISURE INVESTMENT LET TO JD WETHERSPOON & PAPA JOHNS Key Investment Criteria

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WELL SECURED, LONG LEASEHOLD, LEISURE INVESTMENTLET TO JD WETHERSPOON & PAPA JOHNS

Page 2: Victoria Road, Farnborough, GU14 7PG...Victoria Road, Farnborough, GU14 7PG WELL SECURED, LONG LEASEHOLD, LEISURE INVESTMENT LET TO JD WETHERSPOON & PAPA JOHNS Key Investment Criteria

Key Investment Criteria

• Located in the affluent town of Farnborough and forming part of the Phase One of The Meads town centre redevelopment.

• Prominent 117 ft frontage onto Victoria Road below a 77 bedroom Travelodge.

• Over 80% of the income let to JD Wetherspoon(5A1 D&B Rating)

• Over 26 year average weighted unexpired lease term.

• Fixed five yearly rental uplifts on the Wetherspoons.

• New 125 year head lease on a peppercorn rental

• £1,360,000 subject to contract and VAT reflecting a net initial of 6.5% and a equivalent of 7.36% allowing for usual purchaser’s costs of 5.8%

Location

Farnborough is situated in the heart of the Blackwater Valley in the County of Hampshire, approximately 35 miles south west of Central London. Neighbouring towns include Bracknell, Camberley, Farnham and Guildford.

The town benefits from excellent transportation links and is adjacent to the A331 Blackwater Valley relief road, close to Junction 4 and 4a of the M3 Motorway and a few miles north of both the A31 and A3 trunk roads. The M25 (Junction 12) is 24KM (15 miles) to the east affording direct access to both Heathrow (23 miles) and Gatwick (36 miles) Airports. Farnborough also has its own international airport largely used by private jets.

Farnborough benefits from two rail stations; Farnborough and Farnborough North which provide regular direct services to London (Waterloo) with a journey time of approximately 40 minutes.

Page 3: Victoria Road, Farnborough, GU14 7PG...Victoria Road, Farnborough, GU14 7PG WELL SECURED, LONG LEASEHOLD, LEISURE INVESTMENT LET TO JD WETHERSPOON & PAPA JOHNS Key Investment Criteria

SituationThe subject property forms part of a newly developed retail parade fronting onto Victoria Road (B3014) which links with the A325 (Farnborough Road). There are a number of A2/A3 users nearby including RBS, Barclays, Natwest, Bet Fred, KFC and Swinton. The property forms part of Phase One of ‘The Meads’ development which provides circa 183,000 sq ft of retail and leisure accommodation including a 60,000 sq ftSainsbury’s food store. With further phases to come ‘The Meads’ is an £80,000,000 joint venture regeneration project between St. Modwen plc and Salhia Real Estate Company. which will transform Farnborough town centre.

TenureLong Leasehold- Held from Key Property Investments (Number One) Ltd for 125 years from completion at a peppercorn rental.

DescriptionThe property comprises the ground floor only of a newly constructed four storey reinforced steel framed building with brick/block walls and over-cladding under a profiled roof. The leasehold provides two units the majority of which is a newly fitted out JD Wetherspoon (t/a Tilly Shilling) with Papa John’s occupying a corner site on Victoria Road’s junction with Westmead. The upper parts and part ground floor comprise a 77 room, Travelodge Hotel which has been sold off on a long lease.

TenanciesJD WETHERSPOON plc (24/30 Victoria Road)

30 years from 05/04/2011 at a current rental of £75,000 paxsubject to 5 yearly fixed rental increases as follows:05/04/2016 - £80,625 pax05/04/2021 - £86,672 pax05/04/2026 - £93,172 pax05/04/2031 - £100,160 pax05/04/2036 - £107,672 pax

There is a tenant’s option to determine on 05/04/2026 with not less than 6 months written notice.

PAPA JOHN’S (GB) Ltd (32 Victoria Road)

15 years from 26/05/2010 at a current rental of £18,500 paxsubject to 5 yearly upward only rent reviews. There is a tenant’s option to determine on 25/05/2020 with not less than 6 months written notice.

Page 4: Victoria Road, Farnborough, GU14 7PG...Victoria Road, Farnborough, GU14 7PG WELL SECURED, LONG LEASEHOLD, LEISURE INVESTMENT LET TO JD WETHERSPOON & PAPA JOHNS Key Investment Criteria

Financial Year Turnover PTP Net Worth

JD Wetherspoonplc¹

25/07/2010 £996,327,000 £60,458,000 £145,440,000

Papa John’s (GB) Ltd²

27/12/2009 £16,113,000 (£1,459,000) £2,226,000

Current Net Income£93,500 pax

Service ChargeThere is a service charge for the entire property with each tenant contributing towards maintenance and repairs. The current annual service charge period is from 30th September each year. JD Wetherspoon currently has a service charge cap of £10,548 pax (exc. of VAT) for the period up to 30/09/2011. For the remainder of the term the service charge is the service charge cap for the preceding year increased by RPI. Papa John’s have a service charge cap of £9,600 pax (exc. of VAT) up to 30/09/2011. For the remainder of the term the service charge is the service charge cap for the preceding year increased by RPI. There are no current service charge shortfalls (more information available upon request).

Tenant Covenants

¹ JD Wetherspoon plc is the main covenant and has a 5A1 D&B Rating² Papa John’s (GB) Ltd is owned by Papa John’s International Inc (USA). For the year ending 27/03/2011 they reported sales of $1,126,397,000 and a net worth of $207,200,000.

AccommodationThe property affords the following approximate gross internal areas:

JD Wetherspoon: 5,427 sq ft (504m²)Papa John’s: 955 sq ft (88.73m²)

Page 5: Victoria Road, Farnborough, GU14 7PG...Victoria Road, Farnborough, GU14 7PG WELL SECURED, LONG LEASEHOLD, LEISURE INVESTMENT LET TO JD WETHERSPOON & PAPA JOHNS Key Investment Criteria

VATThe property has been elected for VAT and thus VAT will be payable on the purchase price

Proposal

£1,360,000 - reflecting a net initial yield of 6.5% rising to 6.9% in 2016 and ultimately 8.77%. The equivalent yield is 7.36%

MISREPRESENTATION: These particulars do not constitute an offer or contract. They are intended as a guide to prospective purchasers. All reasonable care has been taken in the preparation of these particulars but their accuracy is not guaranteed. The purchaser should satisfy himself and as to the correctness of these details, Neither the agents nor the vendor or lessors are to be or become under any liability or claim in respect of these particulars. These particulars are supplied on the understanding that all negotiations are conducted through this office. August 2011.

Further Details

Ed [email protected]

James [email protected]

David [email protected]