SUNNISIDE LEISURE

SUNDERLAND MODERN MULTI-LET LEISURE INVESTMENT

WELL LET WITH 90% OF INCOME SECURED TO STRONG COVENANTS WITH MINIMUM RISK OF FAILURE

64% OF INCOME WITH FIXED UPLIFTS

INVESTMENT SUMMARY

■ Modern multi-let leisure investment situated in the heart of Sunderland City Centre in close proximity to the newly refurbished Bridges Shopping Centre

■ National operators Empire Cinemas (guaranteed by Cine-UK), Grosvenor Casinos, Frankie & Benny’s and Nando’s

■ Let to 7 tenants and currently producing £988,624 per annum

■ Low average passing rent of £11.95 psf

■ 12 screen cinema with in excess of 550,000 admissions per annum

■ Well let with 90% of income secured to strong covenants with minimum risk of failure

■ AWULT of 16.1 years to expiry and 14.4 years to breaks

■ 64% of income has fixed uplifts

■ Free 650 space car park

■ Asset management opportunities with existing tenancies

■ Low Capital Value of just £141 psf

■ Part listed façade meaning nil rates liability on voids under current legislation

WE ARE SEEKING OFFERS IN EXCESS OF £12,900,000 (TWELVE MILLION NINE HUNDRED THOUSAND POUNDS) WHICH PRODUCES THE FOLLOWING YIELD PROFILE:

NIY: 7.25%

RUNNING YIELD SEPTEMBER 2014: 7.75%

RUNNING YIELD AUGUST 2016: 7.87%

RIVER WEAR

A1018A1018

A183A183

A183A183

A690A690

A1231A1231

H YLTON ROAD

CHESTER ROAD

DU

RHA

M R

OAD

BURN PARK ROAD

ST. MIC

HA

ELS WA

Y

STOC

KTO

N RO

ADTU

NST

ALL

ROAD

PARK ROAD

BUR

DO

N R

OA

D

FARR

ING

DO

N R

OW

ST. MARY ’S WAY

W. WEAR STREET

H IGH STREET W

NO

RFO

LK STREET

ST. THOMAS STREET

BOROUG H ROAD

WEA

RM

OU

TH

BRID

GE PA N NS BANK

TRIMDON STREET

BEECH STREET E ASINGTON STREET

RAIL

WA

Y RO

W

HIND

STR

EET

MOWBRAYPARK

UNIVERSITYOF SUNDERLAND

ST MARY’SCARPARKVAUX BREWERY SITE

BRIDGES SHOPPING CENTRE

TRAVELODGE

TRAVELODGE

CITYCENTRE HOLMESIDE

TOW

ARD

ROA

D

TEN PIN BOWLING

PREMIER INN

Sunderland is a major conurbation in the north-east of England, situated approximately 14 miles south of Newcastle, 11 miles south of Gateshead, 9 miles east of Washington and 38 miles north of Middlesbrough.

Sunderland benefits from good road communications, being close to the A1(M) and A19 which provide direct links into Newcastle Upon Tyne to the north and Darlington to the south. The city has a primary catchment population of approximately 372,000 and a catchment of 830,734 within 10 miles of the city centre.

The property is located approximately 250 metres from Sunderland train station which

provides regular rail services to Newcastle, Manchester, Leeds, Birmingham and Edinburgh. Journey time to London Kings Cross is approximately 3 hours 20 minutes. In addition, Sunderland benefits from the Tyne and Wear Metro light rail system, with 60 stations connecting passengers to the heart of both Newcastle and Sunderland city centres, Gateshead, North and South Tyneside and Newcastle Airport. The Metro has been rated as one of the country’s most efficient modes of transport and currently carries nearly 40 million passenger journeys per year. Nexus is currently investing £385 million in upgrading the system.

LOCATION

A1

A1A696

A69

A19

A1058

A194

A1018

A693

A694

64

63

A1(M) A690A19

A1231

A194(M)

GATESHEAD

SUNDERLAND

WHITLEY BAY

WASHINGTON

CHESTER-LE-STREET

HEBBURN

PONTELAND

NORTHSEA

NEWCASTLEINTERNATIONAL

SOUTH SHIELDS

NEWCASTLE-UPON-TYNE

372,000 830,734THE TOTAL POPULATION WITHIN THE SUNDERLAND PROMIS PRIMARY CATCHMENT AREA

APPROXIMATE POPULATION WITHIN 10 MILES OF THE CITY CENTRE

THE AGE PROFILE OF THE SUNDERLAND PRIMARY CATCHMENT POPULATION INCLUDES A RELATIVELY HIGH PROPORTION OF THE RETIRED AGED 65 AND OVER; YOUNG ADULTS AGED 15-24 ARE ALSO OVER-REPRESENTED.

CATCHMENT & DEMOGRAPHICS

SUNNISIDE LEISURE

SUNNISIDE LEISURE

SITUATION The property is situated on High Street West in the heart of Sunderland’s principal leisure destination, approximately 250 metres to the north-east of the station. The primary frontage to the property is on to High Street West, leading onto Lambton Street. To the north of the development is West Wear Street (A1018) linking St Mary’s

Way (A183) at the junction of Bridge Street.

Wearmouth Bridge provides a link to the northern part of the city, the Stadium of Light and the Sunderland Aquatic Centre.

The scheme benefits from being adjacent to a modern tenpin bowl, operated by 1st Bowl, adding critical mass to this leisure destination.

In additon, a modern 82 bed Travelodge hotel opened in November 2012.

The Bridges Shopping Centre, owned by Land Securities, is located less than 340 metres south west of Sunniside. The scheme, comprising 500,000 sq ft is anchored by, amongst others, Primark, Debenhams, Top Shop, H&M, Dorothy Perkins, Superdry, River Island and Boots.

As part of the Local Authority’s 15 year master plan for Sunniside East, land to the east of the subject property is destined for future mixed use development incorporating retail, office and commercial business space.

SUNDERLANDUNIVERSITY

SUNNISIDE LEISURE

PREMIER INNTRAVELODGECLOWNTREELEISURECENTRE

VAUXBREWERYSITE

BRIDGESSHOPPINGCENTRE

ECHO 24

BRIDGEHOUSE

ST MARY’SCAR PARK

TRAVELODGE

RIVER WEAR

JOPLINGSDEPT STORE

TEN PINBOWLING

MAIN SHOPPING DISTRICT

PRIMARK

CITY PROFILEDespite current economic conditions, Sunderland has recently benefited from numerous private-sector investment projects creating over 3,500 jobs and attracted the first Enterprise Zone investment.

■ In November 2012, Land Securities invested £15 million on the extension of The Bridges Shopping Centre and opened its new 60,000 sq ft Primark store.

■ In December 2012, Nissan announced plans to invest a further £250m at its facility in Sunderland, creating around 3,000 jobs at its plant and in the supply chain.

■ 82 bed Travelodge hotel opened November 2012 in Sunniside East.

■ 125 bed Premier Inn hotel neighbouring Sunderland University, expected to open in Q3 2014.

■ A new Hilton hotel neighbouring the Stadium of Light, Sunderland’s Premiership Football Club, is expected to open in 2015.

■ Planning permission was granted in March 2012 for the redevelopment of Joplings Department Store to provide a 119 bed hotel on the upper floors and retail and leisure on the ground floor.

■ The location for a new 500,000 sq ft central business district, the 26 acre former Vaux Brewery site, has been acquired by the council, and is being enhanced in preparation for investment.

■ In partnership with BT, Sunderland will become the first city in Britain to offer wall-to-wall superfast broadband coverage.

■ St Modwen and Persimmon Homes have submitted plans to the council for the £10m redevelopment of the 17 acre former Pyrex site, located off Pallion New Road, to build 212 family homes.s

Other substantial investments in the city include:

♦ £82.5m for the New Wear Crossing from the Department for Transport.

♦ £8m from Gateshead College for a Skills Academy for Sustainable Manufacturing and Innovation.

♦ £6m for managed workspace in Washington, jointly funded by the City Council and European Regional Development Funds.

At present, Sunderland is clearly an attractive proposition for businesses, with more than 50 ‘live’ enquiries from prospective investors considering the city as a place to do business.

Developed in 2004, the property comprises a modern leisure scheme arranged as two adjacent buildings. One building retains a historic, listed façade which fronts High Street West and comprises a 12-screen cinema

and 5 food and beverage units. The other building comprises a casino and multi-storey car park (650 spaces).

The total GIA is 91,374 sq ft and the site extends to 2.97 acres (1.2 ha).

Sunniside leisure scheme is the only cinema in Sunderland. The scheme provides the only national A3 operator concentration, whilst the remainder of the city provides for more regional brands.

The 650 space multi-storey car park is held on a long leasehold by the local authority, providing all users with free parking.

DESCRIPTION

ACCOMODATIONUnit Use Area

(sq m)Area

(sq ft)

1 Ground Floor(Empire)

Cinema 3,956.5 (3,623*)

42,587 (39,000*)

2 Basement / Ground / Mezzanine (Grosvenor)

Casino 2,271 (1,819*)

24,443 (19,577*)

3 Ground Floor(Frankie & Benny’s)

A3 380.9 4,100

1A Ground Floor 1C First Floor(Dozo restuarant)

A3 A3

403 850.5

4,338 9,154

1B Ground Floor(ASK)

A3 270.4 2,911

2A Ground Floor (Nandos)

A3 325.3 (306.6*)

3,501 (3,300*)

2B Ground Floor(Empire)

A3 31.6 340

TOTAL8,489.5 (7,685*)

91,374 (82,720*)

* Assumed areas in leases

The property has been measured on a Gross Internal Area (GIA) basis in accordance with the RICS Code of Measuring Practice (6th Edition) as follows:

TENURELong Leasehold.

999 year Long leasehold title from the Council of the City of Sunderland at a peppercorn rent and commencing 25th April 2003.

Cinemas

West Wear Street

High Street West

Bed

ford Street

William

Street

TENANCYUnit Tenant Lease Start Lease Expiry

(TOB)Next Rent

ReviewArea

(sq ft)Rent Passing (per annum)

Rent (£/sq ft) Comments

1 Sunderland Cinema 2 Limited (T/A Empire Cinemas) Guarantors: Cine UK Limited and Cinema Holdings 2 Limited

03/09/04 02/09/29 03/09/14 39,000 £535,283 £13.73 Min Fixed Uplift in September 2014 to £605,622 pa. Floor area shown is assumed, actual floor area is 42,587 sq ft.

2 Gala Casino 1 Limited (T/A Grosvenor Casinos) Guarantor: Rank Group Gaming Division Limited

03/09/04 02/09/29 03/09/14 19,577 £173,891 £8.88 Currently being rebranded as Grosvenor Casino.

3 The Restaurant Group (UK) Limited (T/A Frankie & Benny’s)

03/09/04 02/09/29 (02/09/19)

03/09/14 4,100 £65,875 £16.07

1A & 1C

Kandaya Limited (T/A Dozo Buffet Restaurant)

24/08/11 23/08/31 (24/08/21) (24/08/26)

24/08/16 13,492 £94,500 £7.00 Fixed uplifts at 5th & 10th review to 3% pa compounded. £60,000 rent deposit is held.

1B Ask Restaurants Limited 03/09/04 02/09/29 13/01/15 2,911 £54,325 £18.66 Not in occupation. Ongoing negotiations with alternative occupier.

2A Nando’s Chickenland Limited (T/A Nando’s)

03/09/04 02/09/29 03/09/14 3,300 £57,750 £17.50 Floor area shown is assumed, actual floor area is 3,501 sq ft.

2B Sunderland Cinema 2 Limited (T/A Empire Cinemas) Guarantor: Cinema Holdings 2 Limited

27/06/05 26/09/20 27/06/15 340 £7,000 £20.59 To be used as additional sales of merchandise.

Car Park

City Council of Sunderland 03/09/04 990 years remaining

– Peppercorn rent.

TOTAL 82,720 £988,624

CINE-UK LTD (GUARANTOR) (EMPIRE CINEMAS)Sunderland Cinema 2 Ltd is an SPV. Empire Cinemas Ltd was formed in 2005 and operates 162 screens across 16 cinemas in the UK. The lease in Sunderland is guaranteed by Cine–UK under an AGA.

Cineworld is the second largest operator in the UK with 80 cinemas providing 818 screens. The group has the highest number of admissions, totalling 27.3%, of all UK admissions. The immediate parent company to Cine–UK is Cineworld Holdings Ltd and the global parent company is Cineworld Group Plc.

Cine-UK Ltd (Company No. 3005901) has a Dun & Bradstreet rating of 4A1 showing a Minimum risk of failure.

NANDO’S CHICKENLAND LTD (NANDO’S)Nando’s Chickenland Ltd is a leading restaurant chain and has 282 restaurants across the UK. Their immediate parent company is Nando’s Finance Ltd and the group’s global parent company is Nando’s Group Holdings Ltd.

Nando’s Chickenland Ltd (Company No. 2580031) has a Dun & Bradstreet rating of 4A1 showing a Minimum risk of failure.

THE RESTAURANT GROUP (UK) LTD (FRANKIE & BENNY’S)Frankie & Benny’s is a well established and leading Italian – American restaurant brand with 200 outlets nationwide. Their immediate parent company is TRG (Holdings) Ltd and the group’s global parent company is The Restaurant Group Plc which operates 400 restaurants and pubs.

The Restaurant Group (UK) Ltd (Company No. 894426) has a Dun & Bradstreet rating of 5A1 representing a Minimum risk of business failure.

ASK RESTAURANTS LTDASK Restaurants Ltd operates 117 restaurants. It forms part of the Gondola Group of companies, the market leader in the UK casual dining sector.

ASK Restaurants Ltd (Company No. 2792998) has a Dun & Bradstreet rating of 5A1 representing a Minimum risk of business failure.

COVENANT ANALYSIS

RANK GROUP GAMING DIVISON LTD (GUARANTOR) (GROSVENOR CASINOS)Grosvenor Casinos is Great Britain’s leading casino entertainment brand. In 2012, Grosvenor Casinos recorded another period of revenue and operating profit growth (up 4.2% and 10.9% respectively). The Group’s 37 casinos contribute 52% of Rank Group operating profit before exceptional items and central costs.

Rank Group recently completed on the acquisition of 19 casinos operated by Gala Casinos from Gala Coral Group Ltd for circa £179million. All casinos will be shortly rebranded as Grosvenor Casinos. The tenant will be Gala Casino 1 Ltd with Rank Group Gaming Divison Ltd as guarantor.

Rank Group Gaming Divison Ltd (Company No. 3213743) has a Dun & Bradstreet rating of 5A1 representing a Minimum risk of business failure.

KANDAYA LTD (DOZO BUFFET RESTAURANT)Kandaya Ltd (Company No. 7506418) has a Dun & Bradstreet rating of N2 representing a lower than average risk of business failure. A £60,000 rent deposit is held.

D&B Reports can be provided upon request.

ASSET MANAGEMENT

■ Opportunity to complete a surrender and new letting on the ASK restaurant unit.

■ Create a stronger leisure centre identity and profile, with improved branding and signage.

■ Build upon the strong trading of the cinema which has improved average attendances to in excess of 550,000 per annum over the last 3 years.

PLANNINGSunniside was redeveloped in 2003-2004 under planning permission (Ref 02/01683/AME) which amends the earlier permission (Ref 00/00641/AME).

Part of the property accommodating the restaurant and bars has retained an original and listed façade and sits within the central conservation area of Sunderland. The listed status means there is nil rates liability on any voids under current legislation.

A copy of the original planning consent and the conditions contained therein is available on request.

ENVIRONMENTALIn 2010, Delta-Simons’ carried out a Phase 1 Environmental Inspection which concluded that the site was at low risk of environmental hazard or identifiable contamination.

A copy of the survey and EPCs are available on request.

VATWe understand this property has been elected for VAT which will therefore be chargeable on the sale price unless the transaction can be treated as a Transfer of Going Concern (TOGC).

WE ARE SEEKING OFFERS IN EXCESS OF £12,900,000 (TWELVE MILLION NINE HUNDRED THOUSAND POUNDS) WHICH PRODUCES THE FOLLOWING YIELD PROFILE:

NIY: 7.25%

RUNNING YIELD SEPTEMBER 2014: 7.75%

RUNNING YIELD AUGUST 2016: 7.87%

1 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.

2. 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.

3. Montagu Evans LLP nor their employees has any authority to make or give any representation or warranties whatsoever in relation to the property.

4. 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.

5. All the plans and maps provided within the particulars are for identification purposes only.

Misrepresentation Act 1967 and Property Misdescriptions Act

Montagu Evans LLP for themselves and for the vendors or lessors of this property whose agents they are, give notice that:

October 2013 | Ref: 11473

CONTACTFor further information please contact:

5 Bolton Street, London WIJ 8BA

www.montagu-evans.co.uk

Edward GeorgeD: 020 7312 7489 E: edward.george@montagu-evans.co.uk

Freddie JamesD: 020 7866 8613 E: freddie.james@montagu-evans.co.uk

Mark GirlingD: 020 7312 7460 E: mark.girling@montagu-evans.co.uk

Nick RichardsonD: 020 7312 7420 E: nick.richardson@montagu-evans.co.uk

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