UK Leisure Sector- Q2 2015

Click here to download the UK Leisure Sector - Q2 2015 summary

Summary
After a brief, indeed very brief, pause for breath in the lead up to the General Election in May, the leisure property market has witnessed a hectic couple of months with a number of key transactions demonstrating appetite and confidence in the UK hotel, pub, restaurant and leisure sector, is as strong as ever.

The continued strength of Sterling, has further increased overseas investor appetite with substantial transactions completed in Q2 to Canadian Investor Brookfield Property Partners, Singaporean based Frasers Hospitality, and South African based Brait. Given the positive outlook for the UK economy, particularly consumer spending, the underlying weakness in the Eurozone and the uncertainty created by Greece, overseas investor appetite is unlikely to subside anytime soon.

Home based confidence also thankfully remains high. Luke Johnson again demonstrated his conviction to the sector by purchasing shares worth £1.5m in AIM listed Eclectic Bar group. Another perennial sector entrepreneur, David Page, acquired, via the AIM listed group Fulham Shore where he is Chairman, the Franco Manca pizza company, for £27.5m via cash and new shares. The sale completed a remarkable seven year journey for the restaurant group which started in Brixton market in 2008.

Looking ahead, a number of keys deals in the pub sector are poised for Q3. With a portfolio of 160 pubs on the market for Punch reportedly valued at £50m, in addition to the 16 pubs the Competition and Markets Authority has required Greene King to sell in order for their acquisition of Spirit to complete, a summer of activity looks well set. Given Wimbledon is upon us, perhaps it is Game, Set and Match.

UK Leisure Sector Q2 2015 Highlights

June 2014

Leisure: Center Parcs has been sold for an undisclosed sum, said to be £2.4bn, to Canadian investor Brookfield Property Partners.

Pubs: Greene King completed on 22 June its acquisition of Spirit Pub Company. The price Greene King paid for Spirit was £774m.

Pubs: Premium bar and nightclub operator Eclectic Bar Group has reported Luke Johnson is to become executive chairman and is buying three million new shares in the company representing approximately 18.5% of the enlarged company's issued share capital.

Pubs: Stonegate Pub Company has announced the acquisition of 15 sites previously owned by Scotland-based operator the Maclay Group. The £11.7m deal for the 13 freeholds and two leaseholds is expected to complete in early July. Total turnover for the group was £10.16m in the year ending 31 Jan 2015.

Hotels: Singapore-based Frasers Hospitality has completed its acquisition of the Malmaison Hotel du Vin portfolio in the UK for a consideration of £363.4 million from an affiliate of US-based private equity firm KSL Capital Partners.

May 2015

Leisure: Virgin Active sold to South African investment firm Brait in a deal that values the business at approx £1.3 billion. Brait will acquire 80% stake. Virgin Group will retain a 20% stake.

Restaurants: Nando's, has overtaken PizzaExpress to become the leading restaurant chain by sales with a turnover of £470m.

Pubs: Blackstone has sold three separate portfolios of central London pubs, comprising 23 pubs, for a total consideration of £51.8m All pubs were let to Enterprise Inns until 2046.

Pubs: SABMiller, the world's second largest brewing company, has bought Greenwich-based craft brewer Meantime Brewing Company.

Hotels: New York-based Marathon Asset Management has reportedly agreed to purchase a 1,200-room portfolio of five former Mint properties across the UK (in Glasgow, Leeds, Birmingham, Bristol and Manchester) for £160 million from Blackstone.

April 2015

Leisure: Two of Britain's biggest tenpin bowling operators are to merge after The Original Bowling Company announced a takeover of the rival Bowlplex chain in a deal believed to be worth about £30 million.

Leisure: Everyman Media Group has raised £20 million via share placing to be used to buy four cinemas located in Gerrards Cross, Esher, Muswell Hill and Barnet.

Restaurants: Fulham Shore has agreed the acquisition of the Franco Manca pizza chain for c£27.5m.

Restaurants: OLIM Property Limited has acquired eight restaurants in a sale and leaseback deal with Prezzo for a price in excess of £10m. Rent reviews are indexed throughout the 30-year term.

Contact Details:

Graeme Bunn
Managing Director
T: 020 7280 4740
M: 07776 208085
E: graeme.bunn@fleurets.com