loveleisure ISSUE 15
IN THIS ISSUE:
Combermere Abbey: New luxury B&B after 27 month restoration
Specialities:
Business Rates: Winners and losers in 2017 Rating revaluation
Hotels
Pubs and Clubs
Leisure Expert: Sam Spencer appointed to RICS President’s Panel Leisure
Cheltenham Lodge: Park keepers cottage transformed into idyllic restaurant
Restaurants
Marinas
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Welcome to loveleisure
In this edition we see how the leisure sector has provided an opportunity for property owners to diversify in order to access new opportunities. We also track the changes in the hospitality market as well as the growing thirst for gin. We have an excellent example of the type of diversification the Leisure sector can provide with the rather grand and formal setting of Combermere Abbey, Cheshire that has been brought back to life by its inspirational owner. Our visit to The Lawns caravan industry event in September highlighted the increasing quality and sheer range of mobile and touring caravans now being produced in the UK, reflecting the increasing demand in this sector of the leisure market for higher quality products and greater choice.
We also reflect on recent professional activity as well as welcoming new members to the loveleisure team at Bruton Knowles. Finally, if any of the case studies or professional articles stimulate a desire for further information then do not hesitate to contact us.
James Bailey James Bailey Managing Partner, Bruton Knowles
There are changes in the hospitality market as well as a growing thirst for gin!
What we do best
Leisure Property
Valuations Provided for all types of leisure property for accounting purposes or raising finance to facilitate a purchase or expansion/redevelopment.
Restaurants
Agency We acquire, sell and let leisure property for private and corporate clients.
Caravan / Lodge Parks / Golf Courses Driving Ranges / Garden Centres
Professional We carry out rent reviews and lease renewals, rating assessments and appeals, dilapidations claims, dispute resolution and management agreement negotiation. Consultancy We undertake initial feasibility studies for acquisition and development. Planning Initial appraisals and negotiations with local planning authorities as well as subsequent planning applications and appeals.
Public Houses (Tenanted and Managed)
Hotels
Marinas & Waterways The above list is only a sample and, most importantly, we are always happy to talk to people about their leisure property aspirations on an informal basis. Our team is approachable and would be delighted to discuss any requirements or ideas you may have. Please feel free to call.
0845 200 6489
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Property Consultants Help Bring Historic Nottingham Pub to the Market The Griffin Inn located in Plumtree, Nottingham saw a transformation at the end of last year, when Bruton Knowles brought the property to the market with Greene King plc as the client.
Bruton Knowles undertook an initial site assessment first to advise the client on the development potential and associated value of the surplus car park attached to the well-known village pub. Contact with the local planning authority was made by Bruton Knowles, in respect of the potential residential development on the surplus car park area. Architects were then brought in to provide scheme drawings for review and Bruton Knowles also commissioned a Noise Impact Assessment for submission with the planning application. After site meetings with the planning officer and discussions with the Parish Council, Bruton Knowles submitted an application for the development of three detached residential units. Once planning permission had been secured, Bruton Knowles provided valuation and marketing advice to the client before being instructed to market
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the public house, including the car park area, with granted planning permission as potential development land. The property was marketed for an eight-week period, with Bruton Knowles undertaking block viewings and negotiating with all interested parties. After 30 enquiries in the first month of marketing, a sale was secured in August 2016 to a local property investor at 14% over the guide price. The investor then split the title and resold the pub to a locally based leisure and hotel operator. The new owner intends to develop two new luxury detached houses on the site with an extensive refurbishment of the premises to include an extension to the kitchen and the creation of an orangery to the rear of the property.
Glandulas Holiday Park acquired by Welsh Government In support of their transport infrastructure improvement plans, The Welsh Government (WG) had decided in 2012 to create a bypass of the A489 around the town of Newtown in Powys. The proposed route tracked south of the town and at its western end immediately affected Glandulas Holiday Park, a successful static van park overlooking the River Severn. The park is in two separate sections, one of which is elevated and alongside woodland. The scheme proposed a bridge across the new road, linking the two parts.
As associate members of the British Homes and Holiday Parks Association, Bruton Knowles was able to advise WG with the benefit of detailed knowledge of the particular market, allowing appropriate valuations to be placed on the land and property assets, whilst also enabling precise assessments to be determined and agreed in respect of loss of business and profit to the owners. The scheme is now nearing completion and it is satisfying to note that, whilst the bypass has made a significant difference to the landscape, the Park has remained open and retains its appeal with pitch enquiries increasing.
Bruton Knowles was instructed by WG to initially prepare a land cost estimate prior to the Order being made. As the planned route passed directly through the Park, the owners were a principal objector to the scheme and submitted their case at the Public Enquiry. However, the Inspector found in favour of the scheme and the order was granted. Immediately following the granting of the order, WG instructed Bruton Knowles to negotiate with the owners of Glandulas Holiday Park and their professional representatives, with the brief to determine fair compensation under the terms of the appropriate Compulsory Purchase and Compensation legislation. Following two meetings, Sam Spencer and the owners’ representatives determined that the optimum solution for all parties would be for WG to acquire the park and the business in its entirety, which would allow the scheme to proceed at the quickest speed, whilst enabling the owners to find an alternative property and business to trade from. Equally WG could keep the park open, with some allowance for disruption.
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World Famous Grade Property Valued for UK wide Charity A team of six surveyors from various Bruton Knowles’ offices came together to inspect several UK-wide properties owned by an environmental education charity.
The valuation surveyors were assembled in January 2016 when Bruton Knowles was instructed to undertake valuations every five years for 16 properties owned or leased by the Field Studies Council. The properties consisted of nine freehold sites and seven leasehold sites. Several heritage assets are included within the Field Studies portfolio, such as the world-famous Grade I listed building, Flatford Mill. Bruton Knowles’ team of six valuation surveyors were gathered to review all of
Flatford Mill
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the assets which were located from the Scottish Cairngorms to South Devon and from Pembroke to Essex. As part of the instruction, Bruton Knowles provided full valuation reports and rationalised comprehensive existing use values for the client, based upon trading performance and referencing current market conditions. The project was completed in May 2016 when the full reports were delivered to the client, meeting both the budget and time constraints.
Business Rates: Be Prepared Rental levels are the preferred basis for determining rateable values; however, the impact of the latest revaluation on the leisure industry will be determined by comparing trade between 2008 and 2015. This is because rental comparisons for leisure property can be difficult and more typically, there are not always many rents available. So are leisure operators winners or losers in last year’s 2017 Rating Revaluation? – this depends on how the Valuation Office has interpreted valuation principles and their analysis of trade performance, and with the additional learning curve of ‘Check, Challenge, Appeal, things are looking really interesting. First, there is the question of timing: the previous Rating List was based on 2008 trade levels, pre-credit crunch. This has meant that for many businesses they have been paying business rates that are significantly higher than could be justified, based on their post creditcrunch earnings. Unfortunately, trading performances up to 2015 have formed the basis of the new Rating Revaluation and this was during a time of economic recovery; albeit slow and uncertain. This won’t therefore necessarily help those businesses claw anything back or correct the gap that existed in the interim; however there is an appeal process that could serve to correct any current anomalies and go some way to redressing the balance. There are big variations in the level of performance, depending upon business location and sector, so there will be winners and losers in the current revaluation. So what factors may affect rateable values for businesses in the main leisure sectors? Caravan Parks Since 2008, sites have shifted towards an emphasis on lodge sales, whilst maintaining fleet income has become something of a challenge. Lodges have become more sophisticated, including two-storey models, whereas traditional rating valuation models do not reflect these changes. In short, caravan parks may gain from this, but it is expected the Valuation Office will
have reviewed its approach to this sector. As we start to get detailed valuation breakdowns, we can gain further clarity on the new approach. Pubs It’s no secret that pubs have struggled to adapt to the rapid changes in what consumers want. Some have successfully moved into food sales to maintain profits but many others have not managed nearly so well. The rates issue hasn’t helped, with inequalities in rental values versus actual turnover contributing to a number of pubs closing down. As anticipated, many pubs have seen a decrease in their rateable value, but businesses that have suffered over the past few years are in some cases still having to wait to achieve some degree of balance during a lengthy period of transition, which phases down reductions in rates liability. An initial review of an assessment can gauge any potential for reducing the value and understand the impact of any transition, to establish the impact on rates bills for the remaining period of the revaluation, including any refunds back to April 2017. Hotels With many hotels’ rateable values determined by reference to gross receipts, there’s plenty of room for the value of actual trade to be overestimated. For example, if a hotel decides to cater for large coach parties working on low margins, this may not be reflected in the figures for gross takings.
in an attempt to diversify, but in doing so, they’ve attracted the attention of local authorities. What has happened is that local authorities see these extra activities as an opportunity to add ‘value’ to business rates for that area, and in so doing add more strain to what is already a fairly speculative business model. On top of this, established festival sites will have seen significant increases in revenue since 2008 following an increased demand for live performances, not least from the music industry itself as it copes with the falling revenues from sales of CDs. All this is increasingly the upward trend in rateable values across this sector. In conclusion, the heavy reliance on actual trade relating to many leisure sector businesses, means that in effect the amount of rates claimed by the Local Authority is just another form of income tax. Leisure-related businesses need to be prepared: look at your actual trade figures, not just the top line and seek professional guidance to ensure that your current rateable value is as low as it can possibly be.
If you run a hotel, consider then how you make your money and the margins not just the gross take.
Paul Giness
Festival Sites Owners of grounds and estates running festivals have often worked to support agriculture and woodland
paul.giness@ brutonknowles.co.uk
Rating Consultant
mobile: 07970 546926
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Sarah Callander Beckett returned to Combermere Abbey in 1992 after many years of working in the USA in marketing and public relations. loveleisure asked her about the extraordinary changes that were required to make it a success...
Combermere Abbey “With seven listed buildings all in various states of dereliction, a traditional approach to running and managing the estate as a farm only was not going to produce the income stream to repair them. So alternative solutions had to be found... I felt it was very important that once repaired, each one had to have an enterprise which would secure its future, as well as contribute to the rebuilding of an energetic, multi-faceted estate operation that integrated the traditional farming elements with newer commercial concepts. It was also very important that the new businesses would gel with my personality as I am the driving force, and would be embraced enthusiastically and with total commitment. It was also important to prioritise them, as funds were limited and grant and bank support was vital.
This initial idea also brought benefits to our local community – introducing home cooked foods, encouraging guests to visit local towns, eat in pubs and restaurants and enjoy regional and local activities. We had to employ a housekeeper, cleaners and sales and admin staff. The transformation of the abandoned first walled garden for visitors’ enjoyment meant bringing on a full time gardener and in time over the next 15 years as the whole garden was brought back into use, the team expanded into three full time gardeners, a trainee and outside contractors.
I saw an exceptional place with extraordinary landscape and architecturally significant buildings that needed a new and dynamic energy in them. So with over 18 years in lifestyle and tourism PR and marketing, my ‘people’ focused personality looked at hospitality options. The Stables were turned into 10 holiday cottages sleeping 49 over an 18 month period, opening at Christmas 1994. My years in the US taught me that you aim for the top, so country house designer interiors with add on services were introduced into our offer – an anathema with the concept of holiday cottages in the UK!
The estate opened up to do outdoor concerts and annual bluebell walks and the main house was opened to visitors, tour groups lectures and business meetings, and in 1995 also as a wedding venue. Initially this was seen as an added opportunity to fill out of season accommodation but in 2007 the Glasshouse was restored in the Walled Gardens and the wedding business became a reason to restore all the Walled Gardens. Over seven years it became the dominant part of the business and staying onsite a definite USP for couples with the balance tipping over from pure leisure to wedding accommodation.
Key to all this was the marketing and PR – and goodness how that has changed. From the era of paper and snail mail and the written word – to the digital age with websites, social media and internet communication. We have always invested PR to spread the word and I believe it was absolutely the right way to go. The thirteen year battle to secure enabling development funding for the derelict North Wing in the Abbey was won in 2013 and after a 27 month restoration project, it is now a luxury bed and breakfast and also the bridal suite. It adds a very exciting new component to the overall business and has ensured the grade listed Abbey is off the At Risk register and sustainable longterm. Today, the Combermere Estate is like a patchwork quilt – it has kept its traditional roots, protected and enhanced its heritage, opened up to embrace the public in a manageable way so that the quality of the guests experience is never compromised by its new enterprises. It is very difficult to identify exactly the amount of extended benefit our businesses bring, but it is substantial and I am proud that with the introduction of new enterprises it enables it to also maintain its older patronage of the wider community – bringing benefits to all into the future”.
I saw an exceptional place with extraordinary landscape and architecturally significant buildings that needed a new and dynamic energy in them.
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Alfoxton Park, Somerset When we were instructed to value Alfoxton Park the name rang a bell in the literary depths. Meeting the owner produced the explanation. It is the former home of William and Dorothy Wordsworth. Wordsworth is best known for the introduction of Romanticism in English poetry with his friend Samuel Taylor Coleridge. It is reputed that Coleridge started work on The Rime of the Ancient Mariner at Alfoxton Park. During the 1800s the property was in private hands and became a hotel in the early 1900s. The property is a fine Georgian house built in 1707 and surrounded by about 55 acres of deer park. It has fallen into disrepair although plans are in place to fully renovate the house and develop some of the ancillary buildings. There is a superb old barn with a walled garden, opposite the main house. Our valuation considered the potential for a new 4 or 5 star venue in this lovely tranquil location.
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Unoccupied Lodge Transformed into Idyllic Restaurant Located in the heart of Cheltenham, former park-keepers cottage, known as Montpellier Lodge, was sold by property consultants, Bruton Knowles. The unique building was left unoccupied for more than decade and has now been converted into an up-market independent restaurant to fit in with the stylish and artistic feel of the area.
Bruton Knowles saw a number of offers for both the letting and sale of the property but all proved to be unsuccessful as the cost of the works to complete the build proved to be more than expected.
Bruton Knowles was instructed to let or sell Montpellier Lodge and, with its high knowledge and expertise of the local area, it enabled the property consultants to share the vision and enthusiasm for the building’s transformation.
After 18 months a potential tenant was found who understood the values, costs and associated challenges with finishing the works. Lengthy negotiations were then able to take place and as a result the deal was agreed and property was sold.
Refurbishment works had been started previously but the property was not completed due to the owner’s financial constraints.
The restaurant is situated in the perfect location surrounded by the idyllic Montpellier Gardens which helps to create a modern, relaxed and tranquil dining experience for all to enjoy.
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Wimbledon Common
Specialist Charity Valuations Secure Future Facilities in Wimbledon and Putney Bruton Knowles was appointed to value four licence agreements for sports pitches and land on behalf of the Wimbledon and Putney Commons Conservators. The Conservators, which is also a registered charity, was established by Act of Parliament in 1871 to protect and manage Wimbledon Common, Putney Health and Putney Lower Common.
Rugby pitches, changing rooms and showers licensed by London Cornish Rugby Club also required valuations, as well as land on Putney Lower Common licenced to the Spencer Arms public house.
Whilst the land was being utilised to support community football and rugby sport facilities and public houses with outdoor eating and drinking areas, it was vital for the charities licences to meet the requirements of the Charities Act.
The fourth area was land by The Telegraph public house on Putney Heath, which was licenced for use as an outside eating and drinking area.
Our experts carried out an in-depth valuation of four licence agreements which included three football pitches, changing rooms and a club house licensed to Old Thorntonians Football Club.
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Our team inspected all four sites, reviewing the existing licence agreements and then proposed suitable licence fees which were successfully renegotiated with the respective sports clubs and pubs.
Bruton Knowles Privately Markets Nottingham’s Best Western Hotel Hospitality management company, Khanna Enterprises instructed Bruton Knowles to discreetly market Best Western Westminster Hotel in Nottingham without any publicity. The project started when Khanna Enterprises made the strategic decision to unite all sites within a defined geographic area, meaning they no longer required the Nottingham site. Bruton Knowles’ marketing strategy included a carefully placed web presence, using the Nottingham office’s address and ensured that all enquirers signed a confidentially agreement prior to receiving information. Knowledge and expertise on this property proved to be key a part in the project, and with Bruton Knowles’ understanding of the seller’s
requirements and the ability to identify potential, suitable buyers without advertising, the property consultants were able to handpick the final buyer. The property was sold to a private buyer who has undertaken significant refurbishment works. Khanna Enterprises have retained their hotel in Oxford and plan to develop in Manchester. Guidance and advice was given to all parties involved by the Bruton Knowles team to ensure that the transaction was completed promptly, smoothly and discreetly to meet the requests of the client.
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Bruton Knowles Promotes Residential Development on Holiday Park Planning permission was obtained by Bruton Knowles for six dwellings on a caravan sales site in the open countryside in the Malvern Hills.
Bruton Knowles was instructed to obtain residential development on the brownfield site, located in Worcestershire. It was particularly noteworthy due to the holiday park’s location being a considerable distance from the closest settlement boundary. Malvern Hills District Council took the original appeal approval to the High Court on a technicality. The High Court agreed with the council that the appeal had been determined
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incorrectly and approved a review of the original case. With additional insight into land legislation and developing on brownfield land for residential use, we supported a submission of the appeal making further arguments to support the development on site. The decision now provides a determined proposal for the brownfield land creating additional residential premises.
Kelham Hall Bruton Knowles has recently had the pleasure of valuing Kelham Hall for the new owner, Jonathan Pass.
In its location beside the River Trent, the first impression of Kelham Hall is its familiarity and you realise that it looks very similar to London’s St. Pancras Renaissance Hotel. This is because it was designed and built by the same architect, George Gilbert Scott, after the previous stately home burnt down in 1857. It is described as “…a redbrick riot of Gothic styles, with towers, gables, arcades, exquisitely carved columns and fireplaces, and more than a score of different window designs”. For 70 years Kelham Hall was home to a religious order of monks, who built the enormous domed chapel in Byzantine style and added extensive accommodation which is let as offices. Latterly the property has been the head office of Newark & Sherwood District Council. The Council have run events in the Coach House and Dome for many years, which more recently were operated by the new owner under licence, specialising in weddings. It is a spectacular venue for weddings.
The Council recently moved into a new headquarters in Newark and Jonathan was able to purchase the entire property. There is extensive space which includes some superb architectural features. He has significant plans to transform the east and south-facing rooms on upper floors into bespoke bedrooms, bring further space into use and offer history tours of the building and grounds, amongst other ideas.
I have known this lovely building for decades and it’s good to know that it will finally be put into a use that it deserves.
Sam Spencer says: “I have known this lovely building for decades and it’s good to know that it will finally be put into a use that it deserves. So many more people are now going to appreciate its grandeur and charms”. With its excellent location in the heart of England, we expect that business will be brisk and look forward to seeing the next chapter of Kelham Hall’s story realised.
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Expressions of Interest Invited
Kenwick Park Estates Louth, Lincolnshire LN11 8NR
Development woodland in established park with consent for 18 lodges
The site is identified in red; the hotel complex is at the top of the picture, which shows the positon of the access drive to the development plots.
Kenwick Park is a well-established 4-star resort Hotel and Spa two miles south of Louth in the Lincolnshire Wolds Area of Outstanding Natural Beauty. The site is an area of woodland adjacent to developed lodges, south of the main hotel. Approximately 6.5 acres of virgin woodland, adjacent to developed lodges and accessible by all-weather track from the hotel entrance. The property comprises wellestablished deciduous woodland which is ready for development.
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Kenwick Park is a long-established resort hotel and spa with adjacent golf course and other facilities. Lodge owners are encouraged to join and use the facilities. All services are available for connection, subject to contractual agreement.
The site has planning permission for 18 lodges from East Lindsey District Council Refs. N/100/00132/11 and N/100/00366/14. Tel. 01507 601111 Offers in excess of ÂŁ600,000 are invited for the freehold.
Events
The Lawns This event is organised by the Hull and East Riding Caravan Manufacturers Association as a trade show featuring more than 130 new touring caravans and over 150 caravan holiday homes from most of the major UK manufacturers. Despite being a trade show the event has two visitor days enabling the wider public to view the latest models being launched for the 2018 season. Alongside the caravans and park homes a substantial number of supplier and service exhibitors, ranging from insurance, security devices, awnings and a huge range of accessories. Whilst the show attracts over 3,500 trade visitors from the UK and Europe, the public has an opportunity to view a significant range of outdoor leisure accommodation to suit both the budget and luxury end of the market.
Images courtesy of Pathfinder Homes
The continued rise in popularity of caravanning was self-evident when attending the event on Saturday 2nd September, with large crowds and high levels of interest being shown in both touring and static caravans. The luxury chalets drew the largest crowds, who were fascinated to see the latest high specification offerings from a range of manufacturers, with the comparison to domestic housing easily being made and the gap definitely closing. The show also enables you to reflect on the breadth and depth of the UK outdoor leisure industry and its ability to provide both products and services to suit a range of pockets, lifestyles and age groups. Subject to continued investment the caravan industry should continue going from
strength to strength as the levels of innovation continue to increase on an annual basis, from construction techniques through to the standard of equipment and features. Much of the future investment will need to be focused on the manufacturing facilities and processes to ensure that the industry can keep pace with market demand and satisfy the increasing customer expectation that comes with more sophisticated and expensive products. The challenge is to sustain innovation and engineering excellence as manufacturers, retailers and operators as the buying public continue to make their own individual investments, often at substantial levels.
W: pathfinderhomes.co.uk | E: sales@pathfinderhomes.co.uk | T: 01626 833 799 | Explore our Show Homes: TQ12 6TU
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Leisure property expert joins RICS president’s panel Sam Spencer has been appointed to the RICS (Royal Institution of Chartered Surveyors) President’s Panel – and is now one of only a few panel members in the Midlands who specialises in the hospitality, leisure and licensed property trade. Sam, who is an associate at property consultants Bruton Knowles, will now work alongside other RICS President’s Panel members to provide resolutions to land and property industry disputes as part of the organisation’s dispute resolution service. He said: “It is a huge accolade to have achieved this appointment. I am looking forward to bringing my expertise to the panel, sharing my knowledge and supporting hospitality, leisure and licenced property clients with any disputes on behalf of RICS.” The Bruton Knowles expert who specialises in sales, acquisitions, management agreements and business and property valuations is an experienced Chartered Surveyor and Registered Valuer. He has more than 20 years’ experience of working in the hospitality, leisure and healthcare property sectors. James Bailey, managing partner of Bruton Knowles said: “Sam’s appointment to the RICS President’s Panel is testament to his vast experience within the sector, and he will be an important addition to the organisation. Bruton Knowles will also benefit from having one of the country’s most highly regarded specialists working within its team. “The commercial and investment acumen which Sam holds is vast, especially in mixed and alternative-use developments. Our clients can be confident in his ability to provide the most knowledgeable advice and achieve the maximum potential and return from each property scheme and transaction.” RICS Director of ADR Services, Dr John Fletcher, said: “RICS’ Dispute Resolution Service (DRS) is the UK’s leading provider of alternatives to the courts for the resolution of property related disputes.
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“We also accredit members to act as expert witnesses to support and inform decisions in litigation and other judicial proceedings. DRS will only appoint professionals as expert witnesses when we are satisfied they are highly proficient in terms of their subject matter expertise and ability to discharge the role to a very high level. “Sam’s appointment to the President’s panel was made following a rigorous interview process. His market knowledge is first rate, and his appointment will ensure DRS will continue to deliver a superb, high quality, service to the property industry.” Bruton Knowles has 13 offices across the UK and helps property owners, occupiers, developers and investors to achieve more from their land and property.
RICS is a global professional body, which promotes and enforces the highest international standards in the valuation, management and development of land, real estate, construction and infrastructure. For more information visit www.brutonknowles.co.uk
It is a huge accolade to have achieved this appointment... Sam Spencer
loveleisure team welcomes Adrian James and Sarah Kingston Adrian James has joined Bruton Knowles as Partner and Head of the Cardiff office. As a Chartered Surveyor and RICS Registered Valuer with over 35 years’ experience in the leisure sector Adrian has provided valuations for pubs, restaurants, nightclubs, hotels, guest houses, holiday cottage developments, static and touring caravan parks and golf courses. In recent years he has carried out all types of leisure valuations in connection with transactions, lending for improvements and refinancing as well as for company accounts, dissolution of partnerships in locations across South, West and Mid Wales and southern England including the Cotswolds, Gloucestershire, Herefordshire, Somerset and Wiltshire. Adrian has carried out work for clients including sole traders, partnerships and companies covering single assets up to larger portfolios and for lenders including high street banks, challenger banks and specialist/secondary/tertiary lenders.
Over the last year Adrian has carried out a major portfolio valuation of pubs, including all types of operation from large recently built and very high-performing food-orientated houses, to small more traditional back-street houses relying on locally generated wet trade. He has also been busy with valuations of hotels from Pembrokeshire to Surrey and the south Devon coast, from 10 bedrooms to 70, and from unclassified to 5 star rated, including properties with franchised restaurants, specialist wedding venues and leisure-driven properties with spas, leisure clubs and golf facilities. Adrian is delighted to be joining Bruton Knowles loveleisure team and delivering high quality advice to help you achieve your goals.
Adrian James
Bruton Knowles is strengthening its LoveLeisure in the South East with the appointment of Sarah Kingston.
of the loveleisure team. She will increase our capacity to service our regular clients and provide timely advice to new ones.
Sarah joins as Associate to help handle a steep increase in commercial and investment property-related enquiries.
“Sarah is the latest key appointment we have made to keep pace with the workload. We intend to recruit further high calibre staff to realise our growth plans.”
She joins Bruton Knowles from Eddison Taylors where she was involved in the valuation of licenced and leisure property across the South East; she also worked for organisations in the healthcare and retail sectors. Bruton Knowles managing partner James Bailey said: “The Leisure sector is enjoying a continuing period of strong growth. “Sarah brings valuable experience to the firm and will help boost the reputation and profile
delivering high quality advice to help you achieve your goals.
Sarah qualified as a chartered surveyor in 1992 and has worked in the property industry since that time. Commenting on her appointment Sarah said: “This is an exciting time to be joining the loveleisure team at Bruton Knowles. I am looking forward to generating business and increasing market share across the South East.”
I am looking forward to generating business and increasing market share Sarah Kingston
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Britons set new gin record after buying more than 47m bottles in 2017 A recent report in The Times suggests that gin has become the biggest selling spirit in the UK, which is a remarkable transformation in its fortunes, having lagged a poor third behind Scotch Whisky and vodka for decades.
Many people are familiar with the classic gin and tonic, allegedly developed in India during the Raj, the tonic referring to the quinine in the soda water which helped prevent malaria, the taste of which the gin supposedly disguised. Craft gin has become a proper ‘thing’ in the last three years and there are now many bespoke gin bars where one can go and try huge varieties of different gins and matching tonics. They turn the G&T into an art-form, as we discovered at John Gordons in Cheltenham, which has an enviable ambience in summer or winter. Trying to work through the 100 Gins To Try Before You Die book is a challenge with lots of fun. We have also recently enjoyed a visit to Sipsmith during a week-end which almost became a “Fullers” tour of London, and a day at the Gin Festival, both thoroughly recommended whether or not gin is your tipple. For many years the market has been dominated by two big brands but we have found some real favourites which are both interesting and lovely. It is also great news that British craft gins and tonic makers are regularly winning top awards at the International Wine and Spirits Competition.
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Hotels The hotel market certainly seemed to hit its straps in 2017 following a fairly moribund year in the previous 12 months. Preliminary reports of activity suggest that the total value of hotel deals in 2017 will be well in excess of £5 billion, a significant increase from 2016, driven by an increase in activity from overseas investors and a more relaxed attitude towards lending from the banking sector. Previous political events have had a significant influence on this increase in activity, with a notable upsurge in tourist income throughout the UK principally enhanced by the fall in the value of the pound following the EU referendum vote, and helping hospitality businesses across the UK to benefit. However, notwithstanding the increased activity, a recent review from Hotstats analyses the challenges still remaining for individual hotels and groups in maintaining margins, specifically where growth in REVPAR is cancelled out by the rising costs of utilities, payroll and maintenance. Certainly hoteliers will have to anticipate continuing increases in energy and payroll costs for the foreseeable future and budget accordingly. Whilst 2017 saw a modest increase in REVPAR (revenue per available room) these were largely countermanded in London by rises in operational costs. In the Provinces the REVPAR increase was somewhat better, from a lower base as overall occupancy improved too, in line with general economic trends. PwC predict that operators will see further modest increases in REVPAR during 2018, although overall performance is difficult to predict given the continuing political uncertainty.
Hoteliers certainly have further challenges to face during 2018 with staffing and the statutory Minimum Wage increases, rising fixed costs and potential fluctuations in demand. Much of the activity in the market place has been attributed to a significant volume of individual transactions, some deriving from the churning of larger portfolios and the increase in achievable sale prices due to the increased business opportunities available. Reports suggest that foreign investment accounted for about 45% of transactional volumes, with the remainder being made up by UK domestic buyers. It is the latter category where Bruton Knowles is principally involved with hotel deals. The other factor helping the hotel market has been a review of the sector amongst the principal lenders and increased proactivity by the banks in the hotel and hospitality market. Interestingly at a recent forum which has been openly published lenders were particularly ready to confirm their attitude towards hotels as funding an entire business income stream including an asset, rather than just a cold real estate deal. There is also an increasing willingness to consider multi-tiered lending based upon business and asset funding underpinned by a ground rent investment, which enables lenders to securitise for longer term whilst spreading their risk.
Bruton Knowles has been involved in a number of hotel transactions including the off-market sale of the Best Western Westminster Hotel in Nottingham and valuations of significant numbers of hotel assets. Professional With considerable experience in the leisure and hospitality markets, Bruton Knowles regularly receive requests for professional advice in respect of the planning, landlord and tenant and expert witness matters from a variety of clients. The firm has a number of Chartered Surveyors who are regularly called upon to provide expert witness evidence and as a result we have provided commentary in respect of feasibility/planning gain of hotel projects in Torbay, the Cotswolds and Yorkshire. We’ve also provided advice to a number of local planning authorities in respect of planning matters involving sustainability and viability of public houses, completing reports on properties in Oxfordshire, London, Buckinghamshire, Hampshire and Lincolnshire. We currently advise Starbucks on compensation matters and have provided advice to private clients in respect of rent reviews and lease renewals in Lincolnshire, Nottinghamshire and Gloucestershire.
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General Pub Trends 2018 Whilst Brexit is generating a drag on economic growth, occupational demand is as high as ever within the pub property sector. There is now a myriad of small/embryonic pub companies/craft brewers who are hellbent on expansion, yet are struggling to find available property. For the new start up micropub there is still possible conversions of small and empty retail units available in most regional town centres. However, there are now a great number of real ale breweries that have been brewing for over ten years and have aspirations of more physical outlets and of a larger size requirement, usually comprising an actual trading area of over 3,500sqft. These units are harder to find in appropriate locations and with most available options being leasehold rather than the preferred freehold option. 2018 will of course be defined by whether merger and acquisition activity or the rationalisation of some large pub estates brings a sufficient number of opportunities for aspiring pub companies. Unfortunately, most opportunities that do arise will be snapped up by the much larger family brewers such as Youngs and Fullers in the south and the likes of Robinsons or J W Lee’s, for example, in the north. These parties are cash rich and all desire to grow their estates. In recent years they have had to push their regional boundaries to achieve this. A positive of this pent up demand is that whilst there is always a threat of alternative use when a pub becomes available on the open market there is now a trend for continued use as a public house, given the overall demand. The other trend going forward may be more joint ventures such as that recently announced between Derbyshire Craft Brewer, Thornbridge and Craft Beer Distributor and Pub Company, Pivovar. Thornbridge outlets are now planned in Birmingham, Manchester, Bristol and Hull.
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As a customer there has never been a better time for a weekend foray into your local town centre and to appreciate the wide range of real ales on offer. Pubs are a key feature of the UK culture and economy and this sector will fare much better in 2018 than the restaurant sector, which is saturated in most big cities and with associated rising operational and property overheads. The hotel sector is doing well at the present time in terms of operational performance and this is partly to do with the weak pound and the trend for “staycation” as well as more foreign tourists visiting Britain. This staycation trend will continue and therefore benefits those pub companies such as perhaps Wetherspoons and Mitchells & Butlers which have assets that, as well as wet trade, have a healthy food trade but also have letting bedrooms. Indeed these large pubco’s are currently reviewing their sites and looking to provide more letting bedrooms, where viable. There is also a continued trend of more holidays and short breaks/celebrating special occasions rather than persons buying “things” such as clothes, etc. The football World Cup in 2018 will also benefit publicans, assuming England progress beyond the group stages. On a negative note, pubs are still generally suffering from increased operational and premises costs which of course affect overall net profit. Whilst items such as utility bills are now somewhat more under control, other elements, including increased food costs, general red tape and business rates affect most pub businesses. Some well run city centre pubs are affected most by business rates being punished for their own success and endeavours, to increase turnover. A percentage of this turnover is then used to calculate the property’s rateable value and from that is derived the rates payable. This seems unfair.
The hotel sector is doing well at the present time in terms of operational performance
Perhaps in 2018/2019 it will also become apparent that with the popularity of real ale unfortunately too many small breweries have opened up and that some consolidation will be required in this subsector. Some independent real ale breweries such as Titanic in Staffordshire and Ossett Brewery in Yorkshire have now been brewing for over twenty years and have certainly weathered the storm, whilst more recent breweries might well not make the same leap to operating and/or owning multiple outlets. As regards the property market generally, investor demand is currently for prime real estate and, in particular, on long income producing assets as well as those with strong rental growth prospects. The current improved outlook for rental growth is supporting continued investor confidence
in UK real estate. This investor refocus on income is apparent in the rising acquisition of “alternative� asset classes, to include hotels, pubs and student housing. As regards the pub sector, there are very strong covenants to rely on to include the likes of Whitbread and Greene King although funders are now becoming much more savvy and taking a view on more entrepreneurial operators who have a track record of success. In Manchester, for example, some of the highest turnover outlets incorporate live music with real ale, food and in-house bakeries for example, and include independent multi-concept operators such as Mission Mars, etc. In summary, the pub market continues to evolve and for the better, raising standards generally and remaining very innovative. Long may this continue.
Some of our recent valuations Boathouse restaurant
Moorings Hotel
Red House
Sudbury
Sevenoaks
Andover
The Fox and Duck
Oakley Lodge
Red Lion
Buntingford
Cambridge
Hampshire
The Gallows Inn
Old House at Home
Spencer Arms
Derbyshire
Basingstoke
Putney
Harrington Arms
The Plough Motel
Star Inn
Shardlow
Stoke-on-Trent
Leicester
Horse & Jockey
The Plough
Trocadero
Gainsborough
Oxford
Gillingham
Marine Parade
The Plum and Partridge
Manor Hotel
Clacton
North Yorkshire
Mundesley
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Valuations
Masons Arms
Louth
About 20 years ago Sam Spencer was invited by the owner of the Masons Arms in Louth to offer the leasehold business for sale to the open market. At the time the property was a typical town centre former coaching inn, with some interesting original features and a loyal local trade. The property had a public bar, dining room and a large ballroom which was largely unused. In addition, there were 10 standard bedrooms.
Fast forward to 2017 when Sam was instructed to carry out some valuation work for Charles Nickerson in Louth, at their initial meeting Charles asked Sam if he wouldn’t mind having a look at the Masons Arms to proffer some informal advice. Charles had recently acquired the lease on the premises and was in the process of totally renovating the property, using traditional methods and materials to keep faith with the original building, and with a view to upgrading the hotel and its accommodation, so creating a venue of which Louth could be proud.
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In the initial discussions Sam suggested to Charles that he acquired the 900-year ground lease, effectively giving him a freehold interest, which would then properly reflect the value of the renovation work. This he duly did. The pictures show the completed hotel renovation. Unfortunately we do not have any pictures showing the interior of the property prior to Charles’ ownership, although it is plain to see that the hotel has been given a significant transformation. The programme of works and subsequent re-opening has garnered significant local and regional publicity
and we understand that the ballroom is receiving a lot of enquiries for future functions. In essence, the hotel now provides a very pleasing bar and dining room area on the ground floor, a lovely tea room/ private dining room on the first floor overlooking the market place, and 10 excellent contemporary bedrooms. The property and business is a credit to Charles Nickerson and an excellent example of what can be achieved with the application of creativity, time and significant investment.
Your loveleisure team... The loveleisure team are the best in the business; professional and client focused. Each is a specialist in their field and dedicated to helping you achieve your goals. Working with single assets to large portfolios our LoveLeisure team has the in-depth knowledge and experience to deliver high quality advice – so you can always count on us. Our approach to business makes us different, we don’t just offer insight, experience and expertise, we take the time to listen and understand your needs, relationships matter to us and clients find us a refreshing change. For personal impartial advice you can place absolute trust in our loveleisure team.
James Bailey
Sam Spencer
Partner, Nottingham
Associate, Nottingham
james.bailey@ brutonknowles.co.uk
sam.spencer@ brutonknowles.co.uk
mobile: 07715 540019
mobile: 07855 247373
Steven Tasker
Nicola Hudyba
Associate, Manchester
Associate, Birmingham
steven.tasker@ brutonknowles.co.uk
nicola.hudyba@ brutonknowles.co.uk
mobile: 07718 155832
mobile: 07967 824558
Adrian James
Sarah Kingston
Partner, Cardiff
Associate
adrian.james@ brutonknowles.co.uk
sarah.kingston@ brutonknowles.co.uk
mobile: 07738 103289
mobile: 07730 566742
James Pullin Senior Surveyor, Gloucester
May Dudley
james.pullin@ brutonknowles.co.uk
may.dudley@ brutonknowles.co.uk
mobile: 07500 826268
mobile: 07717 343331
Nicholas Broadway
Jeremy Pyatt
Senior Surveyor, Birmingham
Surveyor
Planning Partner, Birmingham
nicholas.broadway@ brutonknowles.co.uk
jeremy.pyatt@ brutonknowles.co.uk
mobile: 07826 946373
mobile: 07827 304455
Paul Giness
Adrian Walsh
Rating Consultant
Partner, Birmingham
paul.giness@ brutonknowles.co.uk
adrian.walsh@ brutonknowles.co.uk
mobile: 07970 546926
mobile: 07768 258362
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An approach you will value
Valuations
Agency
We have the experience and local market knowledge to value all types of property for accounting purposes, sales and purchases or for raising finance for expansion and development.
Even in difficult economic conditions our passion for selling, leasing or acquiring leisure related property has resulted in successful results for both our private and corporate clients.
Contact: Adrian James, Sam Spencer, Steve Tasker
Contact: Adrian James, James Bailey, Sam Spencer
Planning
Building Consultancy
We can help at every stage of the planning process from initial appraisals and negotiations with local planning authorities and stakeholders through to planning applications and dealing with appeals.
From undertaking building surveys to planned preventative maintenance programmes, we take care of every aspect of your property lifecycle so you can focus on doing what you do best.
Contact: Jeremy Pyatt
Contact: Adrian Walsh
Business Rates
Landlord and Tenant
We can ensure that you don’t end up paying too much, understand your rateable value and advise you on how to minimise and manage your business rates.
When entering into a lease you need to understand the terms and conditions negotiated at the outset to help ensure the best conditions for you and your business during the life of the lease. 
Contact: Paul Giness
Contact: Sam Spencer
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Expressions of Interest Invited
Overstone Hall Northampton, NN6 0AS
An impressive listed Country House to be redeveloped CGI image of how Overstone Hall could potentially look restored
48,230 Sq Ft (4,480.57 Sq M)
Overstone Hall is a Grade listed building, originally constructed as a country house comprising circa 119 rooms but latterly used as a school. The Hall occupies approximately 35Â acres of gardens and parkland. In 2001 the property was the subject of a major fire. which caused substantial damage to the principal parts of the building, including the loss of all major interiors. Since that time there have been no works of stabilisation or restoration.
Structurally significant works would be required in order to restore the building to its pre-fire state. A scheme of works that would restore the external fabric and appearance of the building and the major elements of its internal plan, including key features such as the formal entrance hall and staircase is currently being prepared for formal submission to the local planning authority.
In a restored state the property has the potential for a variety of commercial, social and residential uses including: a single residential dwelling; hotel, restaurant, residential and nonresidential institutional use, spa, care facility, offices and education or training centre. The restored Hall may also appeal to individual parties to suit bespoke requirements.
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ISSUE 15
0845 200 6489
www.brutonknowles.co.uk This publication is intended as a general guide, and although every effort has been made to ensure accuracy, liability cannot be accepted for any errors of fact or opinion.