LEISURE INVESTMENT OPPORTUNITYMECCA BINGO, DUNDEEDOUGLASFIELD LEISURE PARK | DOUGLAS ROAD | DUNDEE | DD4 8JX

M E C C A B I N G O | D U N D E EL E I S U R E I N V E S T M E N T O P P O R T U N I T Y

• The property comprises a purpose built bingo hall extending to 3,281 sq.m. (35,337 sq.ft.) with 223 car spaces, let to Mecca Bingo Ltd

(D&B rating of 5A1).

• The site extends to a total of 3.37 acres reflecting a low site coverage of c.21%.

• Located in a well-established out of town retail and leisure zone on the North East side of Dundee city centre. Directly adjacent to Kingsway East Leisure Park which is anchored by Odeon Cinema (who have recently committed to a 10 year extension to their existing lease).

• There has been significant investment in Dundee in recent times which forms part of a wider, longer term plan to regenerate and reinvent itself as

a national cultural centre and hub.

• Other occupiers in the immediate vicinity include Wickes Extra, McDonalds, ASDA, Pets at Home, Bensons for Beds and Archers Sleep Centre.

• Heritable Interest (Scottish equivalent of English Freehold).

• Let to Mecca Bingo Ltd subject to a schedule of condition at £319,864 per annum (£9.05 per sq.ft.) until September 2031 (12 years unexpired).

• Tenant has recently refurbished and agreed a new 10 year extension to their existing lease.

• Lease is subject to RPI linked rent reviews (collared and capped at 0.5%-2.5% per annum) in September 2023 and 2028.

• We are instructed to seek offers in excess of £3,754,000 for our client’s Heritable interest. A purchase at this level would provide a Net Initial Yield of 8.00%, rising to a reversionary yield of 9.06% in 2023 and 10.25% in 2028, allowing for purchaser’s costs of 6.49% and reflects a low capital

rate of £106 per sq.ft.

INVESTMENT SUMMARY

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M E C C A B I N G O | D U N D E EL E I S U R E I N V E S T M E N T O P P O R T U N I T Y

Dundee benefits from a central geographic location, with 90% of Scotland reachable within a 90 minutes’ drive. The city is located on the east coast of Scotland, South of Aberdeen, North East of Glasgow and North of Edinburgh. Often referred to as the ‘City of Discovery’, the population has grown to around 150,000 people and boasts a catchment of over 600,000 within an hour’s drive.

There is an excellent motorway network with the A90/M90 providing direct access to Aberdeen (north) and Edinburgh (south). Furthermore, Dundee railway station is located within the city centre and provides direct rail services to Perth, Edinburgh, Glasgow and Aberdeen. Dundee is Scotland’s fourth largest city.

LOCATION

STRATHMARTINE RD

PITK

ERRO

RD

KINGSWAY KINGSWAY

A90

A90

A85

A92

A92

A923

DOUGLAS RD

The newly developed V&A International Centre for Design opened in September 2018 and is already widely recognised across the world for its distinctive yet exceptional architecture. Since its opening, a 42% increase in visitor numbers to the waterfront area has been achieved with other attractions in the region also recording significant increases in tourism. In 2018, the Wall Street Journal ranked Dundee as number 5 on its ‘Worldwide Hot Destinations’ list.

Dundee is a rejuvenated and exciting regional hub for employment, boasting a diverse economy with a number of employment sectors represented. Digital media in Dundee is highly regarded and the city has a strong reputation in the world’s gaming industry with the University

of Abertay Dundee now also a thriving community for young games designers.

Dundee Regeneration

Dundee is a dynamic and progressive city with a strong cultural identity and is steeped in a history of innovation and creativity. In recent years Dundee has become a thriving cultural destination attracting increasing numbers of tourists year on year. It is famed for its digital media industry, internationally respected and renowned universities and its vibrant design and creative sectors.

DundeeCity Centre

R IVER TAY

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M E C C A B I N G O | D U N D E EL E I S U R E I N V E S T M E N T O P P O R T U N I T Y

The property is located in a well-established out of town retail and leisure zone approximately 3 miles north east of Dundee city centre. It is located adjacent to Kingsway East Leisure Park which is anchored by Odeon Cinema who have recently committed to a 10 year extension to their existing lease. Other occupiers in the immediate vicinity include Wickes Extra, McDonalds, ASDA, Pets at Home, Bensons for Beds and Archers Sleep Centre.

SITUATION

DO

UG

LAS

RO

AD

HAPPYHILLOCK ROAD

LON

GTOW

N R

OAD

BALUNIE DRIVE

DRUM

GEIT

H RD

LEISURE INVESTMENT OPPORTUNITYMECCA BINGO, DUNDEEDOUGLASFIELD LEISURE PARK | DOUGLAS ROAD | DUNDEE | DD4 8JX

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M E C C A B I N G O | D U N D E EL E I S U R E I N V E S T M E N T O P P O R T U N I T Y 0 5

KINGSWAYA90

DOUGLAS RD

HAPPYHILLOCK RD

GREENDYKES RD

STRIPS OFCRAIGIE RD

KINGSWAYA90

DUNDEECITY CENTRE

M E C C A B I N G O | D U N D E EL E I S U R E I N V E S T M E N T O P P O R T U N I T Y

Dundee is Scotland’s fourth largest city with a population of circa 150,000 people. Covering a total area of approximately 60 square kilometres and with a population density of 2,478 individuals living per square kilometre, it is one of the most densely populated cities in Scotland. The working age population is 98,700, representing c. 67% of the total population.

DEMOGRAPHICS

The property comprises a purpose built bingo hall occupied by Mecca Bingo Ltd which sits on a site of approximately 3.37 acres. Overall site coverage is relatively low at 21%.

The building has capacity for 1,420 players and is of steel portal frame construction with a pitched roof and masonry walls which are partly covered with cladding panels. The customer car park lies to the south and east of the building and has been finished with tarmacadam and is suitably landscaped. A covered smoking area has been constructed on the east-facing principal frontage.

Internally the property has been well maintained and was extensively refurbished Q1 2018 which included redecoration, new carpets, seating, bar and buffet service area and an extended gaming area. The property also benefits from air-conditioning.

The property has been measured on a GIA basis and extends to the following area:

DESCRIPTION & ACCOMMODATION

0m 25m 50m 75m

LEISURE INVESTMENT OPPORTUNITY | MECCA BINGO, DUNDEEDOUGLASFIELD LEISURE PARK | DOUGLAS ROAD | DUNDEE | DD4 8JX

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HAPPYHILLOCK ROAD

DOUG

LAS

ROAD

LONG

TOW

N RO

ADArea sq.m. sq.ft.

Ground 2,844 30,623

Mezzanine Plant 138 1,487

Mezzanine ANCILLARY 299 3,227

Total 3,281 35,337

M E C C A B I N G O | D U N D E EL E I S U R E I N V E S T M E N T O P P O R T U N I T Y 0 7

M E C C A B I N G O | D U N D E EL E I S U R E I N V E S T M E N T O P P O R T U N I T Y

TENANCY Mecca Bingo Ltd have recently agreed a new 10 year extension to their existing lease which now expires on the 28th September 2031 (12 years unexpired) at £319,864 per annum, reflecting £9.05 per sq.ft. The lease is subject to a schedule of condition. The rent was rebased in return for the extended lease term.The rent is subject to 5-yearly RPI linked rent reviews that are collared at 0.5% and capped at 2.5% per annum, next due on 29th September 2023 and 29th September 2028. The tenant will have the option to renew the lease for a period of 5, 10 or 15 years at lease expiry, subject to a rent review to open market rent. The renewal is personal to Mecca and subject to nine months prior written notice and the purchaser is obliged to acknowledge the option to renew. Further information available upon request.

TENANT PROFILEMecca Bingo Ltd is the largest national Bingo game operator in the UK with a firm presence in all major towns and cities. It was established in 1961 with its headquarters based in Maidenhead and currently employs nearly 3,000 people across 85 Bingo Halls. Each Bingo hall hosts traditional and electronic versions of bingo, including slot-style games. Mecca Bingo Ltd are licensed and regulated by the UK Gambling Commission and the Alderney Gambling Control Commission.

Mecca Bingo Ltd have a D&B rating of 5A1.

UK BINGO MARKETLicensed bingo clubs in Great Britain provide low-cost games of chance in a safe, secure and regulated environment. Bingo is increasingly a game for all ages with the average age falling to around 45. Research by Winkbingo.com noted that 62% of players were under 45 and 20% were between 18 and 24.There are an estimated 347 bingo venues in the UK and whilst Mecca account for 84 (24%) of the total venues, they outperform taking an estimated 37% of market share.Around 9 million people visited a Mecca Bingo last year and whilst they have been closing poor performing venues leading to shrinking revenues, they have successfully increased spend per visit by 8% in the past year to £23.04 per visit.Whilst closing poor performing venues, Mecca has also been in the process of re-gearing their strongest traders. This unit is a good trader as demonstrated by the recently agreed reversionary lease.

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Mecca Bingo LimitedSC01854120

Rank Group

Rank Group plc's Preliminary results for the 12 months ended 30 June 2019 have recently been reported as shown opposite.Mecca Bingo Ltd is a wholly owned subsidiary of The Rank Group who are a British gambling and leisure company. Other subsidiaries of the Rank Group include Grosvenor Casinos (54 casinos in the UK and 1 in Belgium) and Enracha (9 Bingo Halls in Spain). The Rank Group is listed on the London Stock Exchange and is a constituent of the FTSE 250 index. Rank Group plc have just announced their results which to the year ended 30 June 2019, delivered Group Revenue of £746.5m and Operating Profit of £72.5m.

Mecca Bingo Ltd 30/06/2018 30/06/2017 30/06/2016

Turnover £199,432,000 £203,340,000 £209,543,000

Pre-tax Profit £16,078,000 £39,807,000 £36,665,000

Tangible Net Worth £56,796,000 £59,048,000 £488,346,000

Net Current Assets(Liabilities) £22,228,000 £17,948,000 £458,382,000

Rank Group 2018/19 2017/18

Revenue (£m) 746.5 741.1

Operating profit (£m) 72.5 77.0

Operating margin (%) 9.7 10.4

EBITDA (£m) 117.7 120.0

Capex (£m) 34.0 37.0

Adjusted EPS (p) 14.8 15.0

Dividend (p) 7.7 7.5

£24.00

£23.00

£22.00

£21.00

£20.00

£19.00

£18.00

£17.002013/14 2014/15 2015/16 2016/17 2017/18 2018/19

Mecca VenueSpend Per Visit

M E C C A B I N G O | D U N D E EL E I S U R E I N V E S T M E N T O P P O R T U N I T Y

Tenure

Heritable Interest. (Scottish equivalent of English Freehold).

VAT

The property has not been elected for VAT. Under the terms of the existing lease the Landlord is prohibited from electing the property for VAT.

Energy PerformanceCertificates (EPC’s)

EPC and recommendation report can be provided upon request.

INVESTMENTCONSIDERATIONS• Single let investment opportunity with c. 12 years

unexpired and RPI linked rental reviews.

• Strong covenant with solid trading performance at this location, recently refurbished and committed to

a new lease.

• Large site (3.37 acres) with a low site coverage (21%).

• Attractive yield profile and capital rate per sq.ft.

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Messrs Montagu Evans LLP for themselves and for vendors or lessors of this property whose agents they are, give notice that: (i) The particulars are set out as a general outline only for the guidance of intended purchasers or lessees, and do not constitute, nor constitute part of, an offer or contract. (ii) All descriptions, dimensions, reference to condition and necessary permissions for use and occupation, and other details are given without responsibility and any intending purchasers or tenants should not rely on them as statements or representation of fact but must satisfy themselves by inspection or otherwise as to the correction of each of them. (iii) No person in the employment of Montagu Evans has any authority to make or give any representation or warranty whatever in relation to this property.

PROPERTY MISDESCRIPTIONS ACT 1991: 1. The information contained within these particulars has been checked and unless otherwise stated, is understood to be materially correct at the date of publication. After these details have been printed, circumstances may change outwith our control. When we are advised of any change we will inform all enquirers at the earliest opportunity. 2. Date of publication - August 2019. 3. Unless otherwise stated, all prices and rents are quoted exclusive of Value Added Tax. Prospective purchasers/lessees must satisfy themselves independently as to the incidence of VAT in respect of any transaction. Details prepared: September 2019.

INVESTMENT PROPOSAL

Ross Burnett 0131 221 248307803 604 699ross.burnett@montagu-evans.co.uk

Conor Scott0131 221 246607508 745 018conor.scott@montagu-evans.co.uk

Preston Mommsen0131 221 247107791 518 811preston.mommsen@montagu-evans.co.uk

For further information or to arrange an inspection,please contact the sole selling agents.

We are instructed to seek offers in excess of £3,754,000 subject to contract and for the benefit of our client’s Heritable interest.

A purchase at this level would provide a Net Initial Yield of 8.00% rising to a reversionary yield of 9.06% in2023 and 10.25% in 2028, allowing for purchaser’s costs of 6.49% and reflects a low capital rate of £106 per sq.ft.

LEISURE INVESTMENTOPPORTUNITYMECCA BINGO, DUNDEEDOUGLASFIELD LEISURE PARK | DOUGLAS ROAD | DUNDEE | DD4 8JX