Tenancy & Accommodation
| Floor |
Use |
Floor Areas
(Approx) |
Tenant |
Term |
Rent p.a.x |
Review |
Ground
First
Second |
Hotel
Hotel
Hotel |
627.79 sq m
627.79 sq m
627.79 sq m |
(6,757 sq ft)
(6,757 sq ft)
(6,757 sq ft) |
Travelodge
Hotels Limited (5)
(CRN 00769170) |
25 years from
21st October 2005 until 2030
on a full repairing and
insuring lease. The Landlord
has an option for a
reversionary lease for a
further 5 years. The tenant
has an option to renew the
lease for a further 25 years.(1) |
£218,610 (4) |
21st October
2020 and
2025 and
reviewed
thereafter in
accordance with
the options.
(3) |
Total
|
1,883.37 sq m |
(20,271 sq ft) |
|
|
£218,610 (4) |
|
(1) The property is let until 20th October 2030 by virtue of the lease for 25 years from 21st October 2005. The Landlord has the benefit of a unilateral option in respect of a Reversionary Lease for an additional term of 5 years. The lease contains a Tenant's option to renew for a 25 year term with 5 year rolling tenant option to determine the lease.
(2) The property includes a car park for approximately 40 cars. The occupational lease refers to rights in relation to an additional 52 car parking spaces on the wider estate.
(3) The lease provides for a fixed minimum increase in rent in line with the Harmonised Index of Consumer Prices published by the Office for National Statistics. (The Consumer Price Index of the UK is one of the very few cases where the CPI and the HICP are the same index. see https://www.ons.gov.uk/economy/inflationandpriceindices/articles/coveragedifferencesbetweentheharmonisedindexofconsumerpricesandnationalconsumerpricesindices/2016-05-23)
(4) The current rent reserved under the terms of the lease is £179,206 per annum exclusive. The £218,610 per annum exclusive stated above has been calculated by the Landlord as at the October 2020 rent review by applying the rent review Formula stated in schedule 4 of the lease by increasing the initial rent reserved of £157,500 by the percentage difference between the CPI index for September 2005 and September 2020. Bidders must satisfy themselves before bidding as to the interpretation of the rent review clause and the calculation of the revised rent.
Under the terms of the June 2020 Travelodge Company Voluntary Arrangement (CVA) the Tenant will pay a compromised rent at 70% of the current rent reserved of £179,206 amounting to £125,444 per annum exclusive throughout 2021. The compromised rent period ends on 31st December 2021. The rent due under the terms of the lease from 1st January 2022 will revert to £179,206 being the current rent reserved until such time as the October 2020 rent review has been settled.
The Seller will top up the compromised rent payable during the concessionary rent period by paying the Buyer a sum equivalent to the difference between the compromised rent of £125,444 per annum exclusive and the revised rent of £218,610 per annum exclusive for the period from the date of completion until the 31 December 2021. Therefore the property will effectively produce £218,610 per annum exclusive to the Buyer from completion, subject to the 21st October 2020 rent review being settled.
The terms of the CVA also state that the Tenant will pay to the Landlord, within a defined period any additional rent due as a result of an increase in rent from the October 2020 rent review. In accordance with the terms of the concessionary rent provisions within the 2020 CVA, the increase in rent will be compromised to a) 25% for amounts due from the rent review date (21st October 2020) until 31st December 2020 and b) 70% for amounts due throughout 2021. In this case amounting in aggregate to approximately £29,000.
The Special Conditions of sale provide for any increased rent as a result of the 21st October 2020 rent review to be for the benefit of the Buyer, so there is no obligation on the Buyer to account to the Seller for the increased rent as a result of the 21st October 2020 rent review. Consequently by virtue of the topping up outlined above the Buyer will in effect benefit from being paid a portion of these rent arrears in duplicate for the period from completion to the 31st December 2021.
In addition under the terms of the CVA the Landlord may be entitled to further payments based on a cumulative excess EBITDA calculation over 2020, 2021 and 2022 which would become payable in 12 instalments on a monthly basis commencing in May 2023. See Clause 4.4 p.10 of the CVA.
Bidders must satisfy themselves before bidding as to the interpretation of the rent review clause, calculation of the revised rent, effect of the CVA, the options to renew and the Special Conditions of Sale.
(5) Travelodge is the UK's largest independent hotel brand, with more than 560 hotels and 40,000 guest bedrooms. More than 170 of their hotels have an on-site bar/café/restaurant, and almost all are located close to other restaurants and coffee shops, making Travelodge the ideal base for travel (Source: www.travelodge.co.uk 18/11/2020).
