changes for working capital reports

Total Fitness

Willerby Business Park

Kingston-Upon-Hull

HU10 6ED

Long Income Single Let Leisure Investment

Investment Summary • High yielding long income single-let leisure investment.

• Located on Willerby Business Park in an affluent and popular

suburb of Kingston-upon-Hull.

• Purpose-built two storey health and fitness centre

constructed in 2003, providing state of the art leisure

facilities.

• 81,449 sq ft.

• Freehold.

• Total site area of 5.85 acres, providing a low site coverage of

c.18%.

• Potential for future further development on the site.

• Single-let to Total Fitness Health Clubs Ltd (D&B: 1A2) for a

term of 35 years from 28 November 2003 (21.4 years

unexpired), with a break option on 11 June 2029 (12 years).

• Current rental income of £325,000 per annum reflecting a low

overall rate of £3.99 per sq ft.

• The lease is subject to a minimum fixed uplift of £400,000 per

annum in June 2019.

Total Fitness, Willerby Business Park, Hull, HU10 6ED

We are seeking offers in excess of £3,750,000.

Pricing at this level reflects a Net Initial Yield of

8.13% (assuming purchaser’s costs of 6.52%)

and a minimum reversionary yield of 10% at

the June 2019 fixed uplift.

Location • The property is located c.1.5 miles north of Willerby, a popular affluent suburb of

Kingston-Upon-Hull, which borders a number of other established residential

areas such as Kirk Ella and Cottingham.

• Willerby lies approximately 4.5 miles north west of Hull, 20 miles north of

Scunthorpe and 35 miles south east of York.

• Kingston-Upon-Hull is the regional and economic capital of East Yorkshire and

the Humber region, with a resident population in excess of 450,000 and a

potential catchment within a 30 minute drive of approximately 800,000 people.

• Hull was named UK City of Culture 2017 and £190 million is being invested into

the city through the cultural capital investment programme.

Situation

• The property is situated on the established Willerby Hill Business Park, adjacent

to Castle Hill Hospital.

• Surrounding uses include residential, clinical, agricultural and retail.

• The property prominently fronts the Beverley Humber Bridge link road (A164),

which provides access to the A63 dual carriageway approximately 2.5 miles to

the south and subsequently the M62 motorway.

• The property is within 1 mile of Willerby Shopping Park totalling 115,000 sq ft of

retail space, where key occupiers include Waitrose, McDonalds, Iceland,

Santander, B&M Bargains and Poundstretcher.

• There is very little competition in the surrounding area from other gym operators

with the nearest national operator c.5 miles away.


Description

• The property comprises a purpose built two storey health, fitness and

leisure centre constructed in 2003.

• The building is of steel portal frame construction with part brick and part

profile metal cladding, beneath an insulated metal deck roof.

• There is substantial car parking to the south of the property, with further

overflow parking to the north west.


Ground Floor Mezzanine

Reception area and offices

Squash courts

3 swimming pools

Sauna and steam room

Open plan training room &

Studio

Changing rooms and WC’s

Crèche and hairdressers

Café and lounge area

Open plan training area

Ladies only gym

Consultants room

Studios

Office

200 metre running track

Description Sq. m Sq. Ft

Ground Floor 4,279.4 46,063

Mezzanine 3,287.5 35,386

Total 7,566.9 81,449

Accommodation

Site

• The property occupies a site area of approximately 5.85 acres (2.37 ha), equating to

a low site cover of approximately 18%.

• Given the low site cover, there is the potential for future further development on the

site.

Covenant

• Total Fitness Health Clubs Limited (Company No. 07334974) are a market

leading health and fitness club operator.

• Operating from 17 health clubs across the North of England and Wales, Total

Fitness employ approximately 600 staff and have over 90,000 members. Total

Fitness’ real estate portfolio extends to approximately 1.2million sq. ft., with

each club typically ranging from between 60,000 – 80,000 sq ft.

• In April 2015, a private equity backed management buy-out resulted in North

Edge Capital acquiring a majority stake in Total Fitness Health Clubs Ltd. Total

Fitness have an expansion strategy in place, with the intention to steadily grow

their portfolio within core locations at a rate of one new site per year.

• The Tenant is rated ‘1A2’ by Dun & Bradstreet representing a lower than

average risk of business failure. A summary of the last three years accounts are

provided below:


Tenure

• The property is held Freehold under title number YEA42781.

Tenancy

31 Dec 2016 31 Dec 2015 31 Dec 2014 31 Dec 2013

Sales Turnover £35,774,000 £33,768,000 £31,308,000 £26,649,000

Profit / (Loss)

Before Taxes TBC* £2,717,000 £1,850,000 £1,688,000

Tangible Net

Worth TBC* £1,132,000 (£8,320,000) (£10,682,000)

Net Current

Assets

(Liabilities)

TBC* (£8,982,000) (£19,186,000) (£20,722,000)

Tenant

Total Fitness Health Clubs Ltd.

Term

35 years less 3 days from 28 November 2003.

Break Option

Tenant’s break option 11 June 2029.

Current Rent

£325,000 per annum (£3.99 per sq ft).

Rent Review

Every 5th anniversary from the Deed of Variation.

Rent reviews in June 2019 and June 2024 are to be the

greater of £400,000 p.a. and the open market value.

Usual assumptions and disregards apply.

User As a health and fitness centre within Use Class D2 of the

Town and Country Planning (Use Classes) Order 1987.

Repair

FRI lease subject to a schedule of condition.

Alienation

Assignment and underlettings of the whole permitted with

landlords prior consent.

‘Non-material’ underlettings (aggregating less than 30% of

the total floorspace) permitted without landlords prior

consent.

*Information not yet available for the financial year ending 31/12/16.


Rental Comparables

Investment Comparables

Property Date Size (GIA) Rent Per Annum Rent Psf

The Gym,

Altrincham Dec-16 20,360 £203,600 £10

JD Gyms,

Wigan Jun-16 19,660 £147,450 £7.50

The Gym,

Oldham May-16 16,426 £150,000 £9.13

Pure Gym,

Stirling Nov-15 22,622 £115,000 £5.08

Property Date Size (GIA) Rent Per Annum

(psf)

Unexpired

Term

(break)

Price Net Initial

Yield

Price Cap

Val

Total Fitness,

Bolton Under offer 83,356

£250,000

(£3.00) 15 years Q.£2.6m Q.9% Q.£31

The Gym,

Oldham Feb-17 16,426

£150,000

(£9.13) c.14 years £2.2m 6.4% £134

DW Fitness,

Nottingham Dec-16 45,350

£633,633

(£13.97) c.16.25 years £9.6m 6.19% £211

Pure Gym,

Stockport Dec-16 17,654

£135,252

(£7.66) c.12 years £1.81m 7.03% £102

Pure Gym,

Stirling Nov-16 22,622

£115,000

(£5.08)

c.14 years

(c.6 years) £1.3m 8.4% £57

DW Fitness,

Warrington Oct-16 33,448

£375,000

(£11.21) c.6 years £4m 8.8% £119

Virgin Active,

Derby Mar-15 46,221

£512,335

(£11.08) c.13 years £7.18m 6.74% £155

VAT

The property is elected for VAT and it is anticipated that the transaction will qualify

as a Transfer of a Going Concern (TOGC).

EPC

The property has an EPC rating of D98. A copy of this certificate is available upon

request.

Proposal

We are seeking offers in excess of £3,750,000.

Pricing at this level reflects a Net Initial Yield of 8.13%,

(assuming purchaser’s costs of 6.52%) and a minimum

reversionary yield of 10% at the June 2019 fixed uplift.

Subject to Contract

Callum Robertson

0161 259 0480

[email protected]

Leo Nicholson

0161 259 0482

[email protected]

Charlotte Campbell

0161 259 0469

[email protected]

No. 1 Marsden Street

Manchester

M2 1HW

Further Information

For further information, please contact the following:


Conditions under which these particulars are issued All details in these particulars are given in good faith, but Gerald Eve LLP for themselves and the Vendors/Lessors of this property for whom they act give notice that:- 1. These particulars do not and shall not constitute, in whole or in part, an offer or a contract or part thereof, and Gerald Eve LLP have no authority to make or enter into any such offer or contract. 2. All statements contained in these particulars are made without acceptance of any liability in negligence or otherwise by Gerald Eve LLP, for themselves or for the Vendors/Lessors. 3. None of the statements contained in these particulars is to be relied on as a statement or representation of fact or warranty on any matter whatsoever, and intending purchasers must satisfy themselves by whatever means as to the correctness of any statements made within these particulars. 4. The Vendors/Lessors do not make, give or imply, nor do Gerald Eve LLP or any person in their employment have any authority to make, give or imply, whether in these particulars or otherwise,any representation or warranty whatsoever in relation to the property. The statement does not affect any potential liability under the Property Misdescriptions Act 1991. Particulars issued June 2017.

© 2017 Gerald Eve LLP. All rights reserved. Gerald Eve LLP is a limited liability partnership registered in England and Wales with registered number OC339470 and its registered office at 72 Welbeck Street, London, WIG 0AY

mailto:[email protected]




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