A Henry Stewart Market Briefing
London Leisure and Entertainment Property
An underappreciated, undervalued, property sector (?)
The London entertainment and leisure catchment population approaches 10million individuals who,
on average, spend far, far more on leisure and entertainment than on food. And that takes no
account of the massive spending power of tourists.
Leisure property was once perceived as a specialist, not for institutions, investment sector. That has
and is changing. Entertainment and leisure property is an increasing important sector with high
income, high value, and, potentially solid growth.
This briefing is about how to value leisure and entertainment property, how to maximise the income
from it and how to maximise its value over the medium and long term.
For all property professionals including leisure operators, licensed hospitality retailers, financiers,
investors, lawyers, hospitality and leisure property agents and surveyors, consultants, advisors and
local authorities.
Full documentation will be provided to all participants and adequate time made available for
questions and discussion.
Amusements, bars, betting shops, cafes, cinemas, clubs, coffee-shops, ‘commercial
destinations for tourists’, fitness gyms and dance/pilates studios, food markets, pubs,
restaurants, theatres and sports clubs and centres.
Le Meridien Piccadilly, London W1 - Tuesday, 16 June 2015
Chair:
Kate Nicholls, CEO, ALMR Association of Licensed Multiple Retailers
Contributions from:
Jim Baker, Managing Director, James A Baker Property Consultants
Craig Baylis, Partner, Berwin Leighton Paisner LLP
Neil Bowler, Director, Jenics
Philip Johnston, Director, Harjoh. Consultant, Savills
Ross Kirton, Director, Colliers International
Kevin Marsh, Director, Leisure, Savills
Mick Phipps, Managing Director, PH Land & Developments
Neil Richmond, Founder, Neil Richmond & Co
Ian Simpson, Director, Leisure and Trading, Savills
Martin Taylor, Director, Planning & Consulting, Retail, Hotels and Leisure, Bilfinger GVA
Matt Walton, Head of Hospitality & Leisure, Commercial Banking, Metro Bank
Alistair Watson, Partner – Real Estate Group and Head of Planning & Environment, Taylor Wessing
Trevor Watson, Director, Davis Coffer Lyons
09.00
Registration and Coffee
09.30
Market update – the scale of the leisure sector

Market sub-types and understanding the full range of leisure and entertainment
properties – cinemas, gaming, restaurants, bars, clubs, health and fitness clubs

Changing trends – national v London leisure property values

Diversification

Likely returns
Kate Nicholls, CEO, ALMR Association of Licensed Multiple Retailers
09.45
Prime areas for different sub-sectors of leisure and entertainment and implications
for rental values (including a review of sub-sector rental values and trends)
Covering: pubs, bars, golf, health, fitness, visitor/tourist venues, caravan parks,
holiday properties, theatres and gyms:
o
Current growth trends – market position
o
Current values – where values are ahead or behind
o
Supply and demand – future drivers and outlook for the pubs and
bars’ sector
o
Likely target returns in the pubs and bars sector
Kevin Marsh, Director, Leisure, Savills
o
Trends and growth opportunities in:

Golf

Health and fitness
o

Visitor attractions

Caravan parks and holiday properties
Examining key drivers of capital value for trading entities in the
sector
Ian Simpson, Director, Leisure and Trading, Savills
o
o
Trends and growth in theatre values

Future drivers

Asset management and property appraisal
Trends and valuation forecasts in gym properties

Case studies focusing on acquisitions and sales

Alternative use – what are the likely options to extract value
Philip Johnston, Director, Harjoh. Consultant, Savills
10.30
Questions and discussion
10.45
Coffee
11.00
The Capital and Rental Valuation of Leisure Property


Assessing the capital value of fully operational trading entities:
o
Understanding the difference between an operational valuation and an
investment valuation
o
The factors which determine the value of a leisure related property
Market rents based on a profits approach:
o
When a profits approach is preferable to a comparison approach
o
How a market rent is derived from profitability
Neil Richmond, Founder, Neil Richmond & Co
11.35
Trends in the London Restaurant and Food and Beverage market – consumer
trends and their impact on lease structures and covenant issues

Consumer behaviour

Innovation in F&B

Lease structures

The emergence and role of pop-ups in the restaurant property market:
o
Where is the market heading
o
Landlord attitudes
o
What are the expected returns to operator and landowner
Trevor Watson, Director, Davis Coffer Lyons
12.10
Planning – getting the best value from your leisure property assets

Permitted changes of use in the Use Classes Order

Achieving planning permission for in-town and out-of-town leisure – in and
around London

Redevelopment and alternative use of existing leisure sites

Planning for leisure in town centre regeneration

Football and sporting stadia as a regeneration tool

Integrating the business case (capital expenditure and income for match day and
non-match day activities) into a winning planning case

Creating social value for the resident sporting clubs, businesses and
communities

How investment values are affected by the tenant’s covenant:

o
The impact of covenants
o
Restrictive covenants: the impact these have on investment values in
the short and long term
o
Why choice of tenant is important
Brentford Football Club case study
Martin Taylor, Director, Planning & Consulting, Retail, Hotels and Leisure, Bilfinger
GVA
Alistair Watson, Partner – Real Estate Group and Head of Planning & Environment,
Taylor Wessing
12.55
Questions and discussion
13.10
Lunch
14.10
Funding London leisure and entertainment property – sources and terms

What funding is available and for what specific leisure property

Working capital – easy to source?

Looking ahead for finance – what will the second half of 2015 look like

Joint venture sources
Matt Walton, Head of Hospitality & Leisure, Commercial Banking, Metro Bank
14.40
Licensing and its implications for income and capital values

The importance of licensing as part of the valuable property asset

The licence is granted to the property which brings about challenges when:

o
the licensed premises is tenanted
o
there are disputes
o
there are complications relating to the value of the licence in a property
valuation
Recognising and avoiding the common mistakes in contractual agreements in
licensing which have a direct impact on the valuable property asset
Craig Baylis, Partner, Berwin Leighton Paisner LLP
15.10
Questions and discussion
15.15
Tea
15.30
Unlocking value in unused and redundant space – some case studies

How to maximise capital by developing redundant leisure sites and looking for
conversion potential

Planning challenges – working with authorities

‘Asset of Community’ value issues, including change of use and permitted
development rights

Managing risk - rental and investment values and joint ventures

Extracting parties from toxic leases – impact on roll out plans
Neil Bowler, Director, Jenics
Mick Phipps, Managing Director, PH Land & Developments
16.10
The art of maximising value from leisure property

Growing the asset and investment opportunity – a look at historical yields and
trends

Enhancing profitability by looking for alternative use

Maximising by development and better land use
Jim Baker, Managing Director, James A Baker Property Consultants
Neil Bowler, Director, Jenics
Ross Kirton, Director, Colliers International
16.55
Questions and discussion followed by Chair’s closing remarks
17.15
Close of conference