A Henry Stewart Market Briefing
London Leisure and Entertainment Property
An underappreciated, undervalued, property sector (?)
The London entertainment and leisure catchment population approaches 10million individuals who, on average, spend far, far more on leisure and entertainment than on food. And that takes no account of the massive spending power of tourists.
Leisure property was once perceived as a specialist, not for institutions, investment sector. That has and is changing. Entertainment and leisure property is an increasing important sector with high income, high value, and, potentially solid growth.
This briefing is about how to value leisure and entertainment property, how to maximise the income from it and how to maximise its value over the medium and long term.
For all property professionals including leisure operators, licensed hospitality retailers, financiers, investors, lawyers, hospitality and leisure property agents and surveyors, consultants, advisors and local authorities.
Full documentation will be provided to all participants and adequate time made available for questions and discussion.
Le Meridien Piccadilly, London W1 - Tuesday, 16 June 2015
Chair:
Kate Nicholls, CEO, ALMR Association of Licensed Multiple Retailers
Contributions from:
Jim Baker, Managing Director, James A Baker Property Consultants
Craig Baylis, Partner,Berwin Leighton Paisner LLP
Neil Bowler, Director,Jenics
Philip Johnston, Director,Harjoh. Consultant, Savills
Ross Kirton, Director,Colliers International
Kevin Marsh, Director, Leisure, Savills
Mick Phipps, Managing Director, PH Land & Developments
Neil Richmond, Founder, Neil Richmond & Co
Ian Simpson, Director, Leisure and Trading, Savills
Martin Taylor, Director, Planning & Consulting, Retail, Hotels and Leisure, Bilfinger GVA
Matt Walton, Head of Hospitality & Leisure, Commercial Banking, Metro Bank
Alistair Watson, Partner – Real Estate Group and Head of Planning & Environment, Taylor Wessing
Trevor Watson, Director, Davis Coffer Lyons
09.00Registration and Coffee
09.30Market update – the scale of the leisure sector
- Market sub-types and understanding the full range of leisure and entertainment properties – cinemas, gaming, restaurants, bars, clubs, health and fitness clubs
- Changing trends – national v London leisure property values
- Diversification
- Likely returns
Kate Nicholls, CEO, ALMR Association of Licensed Multiple Retailers
09.45Prime areas for different sub-sectors of leisure and entertainment and implications for rental values (including a review of sub-sector rental values and trends)
Covering: pubs, bars, golf, health, fitness, visitor/tourist venues, caravan parks, holiday properties, theatres and gyms:
- Current growth trends – market position
- Current values – where values are ahead or behind
- Supply and demand – future drivers and outlook for the pubs and bars’ sector
- Likely target returns in the pubs and bars sector
Kevin Marsh, Director, Leisure, Savills
- Trends and growth opportunities in:
- Golf
- Health and fitness
- Visitor attractions
- Caravan parks and holiday properties
- Examining key drivers of capital value for trading entitiesin the sector
Ian Simpson, Director, Leisure and Trading, Savills
- Trends and growth in theatre values
- Future drivers
- Asset management and property appraisal
- Trends and valuation forecasts in gym properties
- Case studies focusing on acquisitions and sales
- Alternative use – what are the likely options to extract value
Philip Johnston, Director,Harjoh. Consultant, Savills
10.30Questions and discussion
10.45Coffee
11.00The Capital and Rental Valuation of Leisure Property
- Assessing the capital value of fully operational trading entities:
- Understanding the difference between an operational valuation and an investment valuation
- The factors which determine the value of a leisure related property
- Market rents based on a profits approach:
- When a profits approach is preferable to a comparison approach
- How a market rent is derived from profitability
Neil Richmond, Founder, Neil Richmond & Co
11.35Trends in the London Restaurant and Food and Beverage market – consumer trends and their impact on lease structures and covenant issues
- Consumer behaviour
- Innovation in F&B
- Lease structures
- The emergence and role of pop-ups in the restaurant property market:
- Where is the market heading
- Landlord attitudes
- What are the expected returns to operator and landowner
Trevor Watson, Director, Davis Coffer Lyons
12.10Planning – getting the best value from your leisure property assets
- Permitted changes of use in the Use Classes Order
- Achieving planning permission for in-town and out-of-town leisure – in and around London
- Redevelopment and alternative use of existing leisure sites
- Planning for leisure in town centre regeneration
- Football and sporting stadia as a regeneration tool
- Integrating the business case (capital expenditure and income for match day and non-match day activities) into a winning planning case
- Creating social value for the resident sporting clubs, businesses and communities
- How investment values are affected by the tenant’s covenant:
- The impact of covenants
- Restrictive covenants: the impact these have on investment values in the short and long term
- Why choice of tenant is important
- Brentford Football Club case study
Martin Taylor, Director, Planning & Consulting, Retail, Hotels and Leisure, Bilfinger GVA
Alistair Watson, Partner – Real Estate Group and Head of Planning & Environment, Taylor Wessing
12.55Questions and discussion
13.10Lunch
14.10Funding London leisure and entertainment property – sources and terms
- What funding is available and for what specific leisure property
- Working capital – easy to source?
- Looking ahead for finance – what will the second half of 2015 look like
- Joint venture sources
Matt Walton, Head of Hospitality & Leisure, Commercial Banking,Metro Bank
14.40Licensing and its implications for income and capital values
- The importance of licensing as part of the valuable property asset
- The licence is granted to the property which brings about challenges when:
- the licensed premises is tenanted
- there are disputes
- there are complications relating to the value of the licence in a property valuation
- Recognising and avoiding the common mistakes in contractual agreements in licensing which have a direct impact on the valuable property asset
Craig Baylis, Partner,Berwin Leighton Paisner LLP
15.10Questions and discussion
15.15Tea
15.30Unlocking value in unused and redundant space – some case studies
- How to maximise capital by developing redundant leisure sites and looking for conversion potential
- Planning challenges – working with authorities
- ‘Asset of Community’ value issues, including change of use and permitted development rights
- Managing risk - rental and investment values and joint ventures
- Extracting parties from toxic leases – impact on roll out plans
Neil Bowler, Director,Jenics
Mick Phipps, Managing Director, PH Land & Developments
16.10The art of maximising value from leisure property
- Growing the asset and investment opportunity – a look at historical yields and trends
- Enhancing profitability by looking for alternative use
- Maximisingby development and better land use
Jim Baker, Managing Director, James A Baker Property Consultants
Neil Bowler, Director,Jenics
Ross Kirton, Director,Colliers International
16.55Questions and discussion followed by Chair’s closing remarks
17.15Close of conference