Click here to download the UK Leisure Sector - Q1 2015 summary
After the hectic pace of transactional activity in 2014 it is perhaps of little surprise that the leisure property market took time to draw breath in Q1 2015, as significant activity was much reduced. The looming General Election no doubt a key factor influencing potential vendors, as a "wait and see" policy emerges.
That said, not everyone was sat watching. Perennially active Cerberus, continued their acquisition of UK leisure investments with the purchase of 18 Holiday Inn hotels across the UK for £225 million. New entrants into the market, Brentwood Investments, got off to a flying start with the purchase of BB's Coffee & Muffins.
The quarter also saw the emergence of a growing trend of deals involving pub companies and breweries as the Liberation Group acquired Somerset-based Butcombe Brewery, creating a business that operates 94 pubs and bars and two breweries brewing more than 30,000 barrels. Marston's also reached agreement with Daniel Thwaites to acquire the trading operations of Thwaites beer division. The acquisition including two leading premium brands: Wainwright and Lancaster Bomber ales.
Sadly, Q1 again saw a CVA, this time by Intertain, owner of the Walkabout brand, providing a timely reminder that high levels of debt and excessive leasehold rents remain an issue in the sector despite the wider positive news from both the industry and the UK economy.
UK Leisure Sector Q1 2015 Highlights
Leisure: Essenden has reported 6% increase in like-for-like sales for the 52 week period ending 28 December 2014. The group, which operates 30 venues under the Tenpin brand, saw full-year EBITDA increase by 40% to £5.7m, while revenue climbed from £45.6m to £46.8m.
Restaurants: Brentwood Investments acquires the c50-strong BB's Coffee & Muffins chain for a sum believed to be in the region of €10m (£7.1m). The company has more than 50 outlets in shopping malls and outlet villages.
Restaurants: Gondola, the parent company of the Bridgepoint-backed ASK Italian and Zizzi chains, is set to be renamed Azzurri Group.
Restaurants: Tragus, the operator of the Bella Italia and Café Rouge brands, is set to enter a new era under the name the Casual Dining Group.
Hotels: Cerberus Capital Management acquires a portfolio of 18 Holiday Inn hotels across the UK for £225 million (2,443 rooms, £92,000 per room) from a joint venture between Lehman Brothers Real Estate, Realstar and GIC Real Estate.
Pubs: Marston's reaches agreement with Daniel Thwaites to acquire the trading operations of Thwaites beer division. The acquisition includes two leading, premium brands: Wainwright and Lancaster Bomber ales. The total cash consideration is £25.1 million.
Pubs: Market Rent Option (MRO) for tied tenants of large Pub Companies (500+ pubs) receives Royal Assent from Parliament.
Leisure: Merlin Entertainments has reported a good full year to 27 December 2014. Visitor numbers were up 4.9% with underlying EBITDA growing 7.8% LfL to £411m.
Leisure: Terra Firma, is to place its Odeon and UCI cinemas chain on the market, with an asking price of c£1bn. Odeon & UCI currently operates 2,182 cinema screens in 237 locations.
Leisure: Madame Tassauds for sale at £320 million. Merlin Entertainments own the business but the building belongs to Secure Income Reit which floated last year, with a £1.5 billion portfolio inc Alton Towers & Thorpe Park. Tassauds pay £15.5m a year in rent.
Hotels: Topland exchange contracts to acquire The Feathers Group, a portfolio of eight hotels with 726 bedrooms across North West England.
Restaurants: The board of Prezzo has announced shareholders have accepted TPG Capital's £303.7m bid to acquire the company.
Hotels: Jurys Inn is to be sold to US private equity firm Lone Star Funds for £680 million (approximately £90,300 per room for the 7,523-key portfolio). Lone Star has signed a definitive agreement to purchase the chain of 31 hotels across the UK, Ireland and the Czech Republic.
Pubs: Walkabout operator Intertain, owned by Better Capital, and operating 32 sites, is to undertake a Company Voluntary Arrangement (CVA). The company's stakeholders have agreed a financial restructuring to reduce debt from £30m to £14m, conditional on the approval of the CVA.
Pubs: Spirit Pub Company shareholders have voted in favour of Greene King's £773.6m takeover bid, with 99.99% of those voting approving the deal. The deal, expected to be completed by the end of May, will create a 3,127-strong pub company.
Pubs: Liberation Group acquires the Somerset-based Butcombe Brewery, creating a business that operates 94 pubs and bars and two breweries brewing more than 30,000 barrels. Butcombe operates 19 managed pubs. In its most recent result, Butcombe reported sales of £8.7m in the year to 28 February 2014 and Ebitda of £2.1m.
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