TRAVELODGE

PWLLHELI, GWYNEDD, NORTH

WALES

H O T E L F O RWA R D F U N D I N G I N V E S T M E N T O P P O RT U N I T Y

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INVESTMENT SUMMARY

• Forward funding opportunity to acquire a freehold hotel in a prominent

location in Pwllheli on the coastline of the Llyn Peninsula, an Area of

Outstanding Natural Beauty

• Pwllheli is approximately 6.5 mils east of Abersoch, 14 miles west of

Porthmadog, 40 miles south of Anglesey, 70 miles west of Wrexham and

150 miles north from Cardiff

• Highly accessible via public transport and within short walking distance of

Pwllheli town centre

• The property will be built over three-storeys and include 68 en-suite

bedrooms together with a bar and a cafe restaurant and 65 car parking

spaces, plus an additional three accessible spaces

• The property will be let to Travelodge Hotels Ltd for 25 years upon

practical completion on an agreed rent of £323,000 p.a. (£4,750 per bed

p.a.) subject to five yearly rent reviews linked to CPI with a collar and cap

of 1% and 4%

• Freehold

• The developer, Liberty Properties, has an exceptional track record in

commercial property development including developing a number of

Travelodge hotels

We are seeking offers in excess of £5,770,000 (Five Million Seven Hundred and Seventy Thousand Pounds) reflecting

a Net Initial Yield of 5.50% assuming purchasers costs of 1.80%, and a capital value of only £90,000 per bedroom.

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LOCATION

Pwllheli is a coastal town on the north west coast of Walesand is known as the capital of the Llyn Peninsula, an Areaof Outstanding Natural Beauty covering 62 square miles.The town is also in close proximity to Snowdonia NationalPark which is located approximately 17 miles to the east.

Pwllheli can be accessed via the A497 from the east whichconnects the town to Porthmadog and the A499 whichconnects with Caernarfon. The town is also well serviced bypublic transport networks including the Pwllheli bus stationin the town centre that provides routes throughout Pwllhelias well as the wider Llyn Peninsula area. Pwllheli trainstation offers a direct service to the Cambrain Coast linerunning to Machynlleth with services running on toShrewsbury and Birmingham, whilst also providingconnections to the regional rail network. Over the next fiveyears, KeolisAmey, which will operate the rail network innorth Wales from October 2018, expect to increase thenumber of services to Pwhllheli station as well as reducefares to encourage greater travel to the area.

Pwllheli also boasts a retail offering that includes Asda andLidl supermarkets, as well as a Costa Coffee and a numberof pubs and restaurants in the town centre.

Due to its prime location in the Llyn Peninsula and closeproximity to Snowdonia, Pwllheli and the immediatesurrounding area attracts over 8 million visitors a year andhas a vibrant tourism economy.

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SITUATION

The site is situated on the western side of Pwllheli Harbour

to the south east of the town centre, and is located on the

very popular and busy marina development, adjacent to the

recently constructed Plas Heli sailing academy.

Access is provided by Marina Road which connects the

marina at the Aberech Road (A497) to the east of Pwllheli

town centre. The site can also be accessed by bus along

Marina Road and easily accessed by train as Pwllheli train

station is approximately 0.5 miles to the west of the site.

Plas Heli is the Welsh National Sailing Academy that acts

as the Royal Yachting Association training centre for sailing

squads and hosts both international and national dingy

sailing events every year. These events are usually held

every weekend in the spring and summer months and

attract hundreds of people to the area during each event.

The proposed Travelodge facility will be the first budget

hotel offering in Pwllheli and the surrounding area in the

Llyn Peninsual. Due to the its prime location next to Plas

Heli, which attracts thousands of visitors every year, as well

as the significant undersupply of budget hotels in the

region, Travelodge Pwllheli is expected to perform strongly

upon practical completion.

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TENURE

The property is held freehold.

TENANCY

The property will be let to Travelodge Hotels

Ltd on a new lease for 25 years from

practical completion, which is expected at

the end of Q3 2019. The agreed rent is

£323,000 per annum, reflecting £4,750 per

bed per annum and will be subject to five

yearly rent reviews linked to CPI with a

collar of 1% and a cap of 4%.

The tenant also has an option to renew for a

further 25 years upon expiry of the lease.

COVENANT

Travelodge Hotels Ltd is the UK’s

largest independent hotel brand

boasting over 550 hotels and 42,000

bedrooms across the UK and is wholly

owned by a syndicate of Golden Tree

Asset Management, Avenue Capital

Group and Goldman Sachs who took

ownership of the business in 2012.

Since 2012 a significant investment

program has taken place with close to

£100m deployed in order to modernise

35,000 rooms across the portfolio.

Travelodge continues to invest in the

quality of their hotels, continuing the roll

out of the new SuperRoom concept

ongoing through 2018.

Audited 2017 results show the company

total revenue increasing by 6.6% to

£637.1m from the previous year with

EBITDA rising by £2.3m to £112.4m.

The positive financial figures were

achieved as a consequence of RevPAR

going up by 2.9% to £40.49 and ADR

increasing by 2.8% to £53.19,

occupancy remained steady at 76.1%.

Over the next three years, Travelodge

expects to open 30 hotels with over

2,500 rooms with 15 of these due in

2018; demonstrating the continuing

success and ambition of the business.

Travelodge Hotels Ltd currently has a

‘Minimum’ risk of business failure

advised by Dunn & Bradsreet (D&B)

with a resultant rating of ‘5A1’ and are

seen as an attractive investment tenant.

31/12/2017 31/12/2016 31/12/2015

Turnover £624,000,000 £587,700,000 £552,100,000

Profit / (Loss) Before Taxes

£45,200,000 £46,800,000 (£545,300,000)

Net Current Assets Less Current Liabilities

£411,800,000 £366,400,000 £318,200,000

Tangible Net Worth £316,100,00 £271,600,000 £224,600,000

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DESCRIPTION

The property will be arranged over ground and two upper floors with a total of 68 beds. All rooms will be fitted to the latest Travelodge specifications and will

include a range of double and family rooms. On the ground floor, there will be a reception, bar café and restaurant. Additionally, there will be a minimum of 65

car parking spaces, plus three accessible spaces, that will be located to the front of the property for guest use only.

Below are to scale architect drawings of the proposed floor and site plans.

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Ground Floor First & Second Floors Site Plan

DEVELOPER

The development will be undertaken by Liberty Properties

Developments Ltd which is a Chester based development and

investment company, operational in the North West, Midlands and

Wales, and have been established for over 30 years.

Liberty specialise in providing business with property solutions and

have an exceptional track record in all commercial sectors.

Liberty have already developed two Travelodge hotels in Egham,

above a Waitrose store and in Stafford on the Hough retail and

leisure park.

For further information on Liberty please visit www.libertyprops.com.

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PROFESSIONAL TEAM

Architect & Cost Consultant Engineer Planning Consultant

TRACK RECORD

HQ, Chester £72.5m redevelopment of Cheshire Police HQ

funded by Deutsche Bank. The 250,000 sq. ft.

redevelopment comprises of 80,000 sq. ft. of

offices, 34 apartments and a 70 bed Abode Hotel.

Waitrose & Travelodge, Egham£11m redevelopment funded by Ropemaker of an

existing town centre car park to provide 174 space

basement car park, with a 24,000 sq. ft. Waitrose

food store and 82 bed Travelodge above.

Stafford Leisure Park, StaffordFinal phase of the redevelopment for Liberty

Mercian Ltd as client of the former Alstom Site to

provide a 72 bed Travelodge, Pizza Hut and drive

thru KFC.

Important notice. Particulars: These particulars are not an offer or contract, nor part of one. You should not rely on statements by Knight Frank LLP in the particulars or by word of mouth or in writing (“information”) as being

factually accurate about the property, its condition or its value. Neither Knight Frank LLP has any authority to make any representations about the property, and accordingly any information given is entirely without

responsibility on the part of the agents, seller (s) or lessor (s). Photos etc: The photographs show only certain parts of the property as they appeared at the time they were taken. Areas, measurements and distances given

are approximate only. Regulations etc: Any reference to alterations to, or use of, any part of the property does not mean that any necessary planning, building regulations or other consent has been obtained. A buyer or

lessee must find out by inspection or in other ways that these matters have been properly dealt with and all that information is correct. VAT: The VAT position relating to the property may change without notice. Knight

Frank LLP is a limited liability partnership registered in England with registered number OC305934. Our registered office is 55 Baker Street, London, W1U 8AN, where you may look at a list of members' names. June 2018.

PROPOSAL

CONTACTFor further information please contact the below:

Charles Fletcher+44 (0) 207 861 1450+44 (0) 783 857 5063Charles.fletcher@knightfrank.com

Tom Dawson+44 (0) 161 833 7717+44 (0) 746 872 7122Tom.dawson@knightfrank.com

Chris Field+44 (0) 207 861 1088+44 (0) 797 673 0719Chris.field@knightfrank.com

Offers in excess of £5,770,000 (Five Million Seven Hundred and Seventy ThousandPounds) are invited exclusive of VAT, reflecting a Net Initial Yield of 5.50% after assumingpurchasers costs of 1.80%.