Investment for sale - Prince of Wales, 150-151 Drury Lane, London, WC2B 5TD

<strong>Description</strong><br>The Prince of Wales is arranged over ground, basement and three upper floors with stone elevations beneath a flat roof.<br><br><strong>Situation</strong><br>The property is situated on Drury Lane, a short distance from Covent Garden Underground Station, in the heart of theatreland making it ideally positioned to benefit from the high number of visitors generated by the diverse entertainment offering.<br /> <br /> The Prince of Wales is surrounded by the popular tourist destinations of Oxford Street and The British Museum to the north, Covent Garden and The Strand to the south along with Leicester Square, Seven Dials and Piccadilly to the west, each with their own diverse entertainment and retail offering.<br><br><strong>Tenure and Tenancy</strong><br>The property is held freehold (Title Number 426466).<br /> <br /> The entire property is let on a 30 year lease to Spirit Pub Company (Managed) Limited (Company Number 05269240) and guaranteed by Punch Pubs & Co Limited (Company Number 03982441) expiring on 23 June 2034 at a current rent of £340,058 per annum which is subject to an open market review on 25 December 2024 and 2029.<br /> <br /> In addition to the statutory right to renew the lease under the Landlord and Tenant 1954 Act, the tenant also has a contractual right to renew the lease for a further 30 years on the same terms.<br /> <br /> There is an Authorised Guarantee Agreement from Spirit Managed Inns Limited (Company No. 05266815) and a guarantee of the Authorised Guarantee Agreement from Spirit Intermediate Holdings Limited (Company No. 04914762).<br><br><strong>Planning</strong><br>Our initial enquiries of the local authority have revealed that the property is not listed although it is located within the Covent Garden Conservation Area.<br><br><strong>Covenant</strong><br>The property is let to Spirit Pub Company (Managed) Limited (Company Number 05269240) which forms part of the wider Greene King Limited company. The group currently operate around 3,100 pubs, restaurants and hotels across the UK including brands such as Metropolitan Pub Company,<br /> Hungry Horse, Chef & Brewer and Farmhouse Inns.<br /> <br /> In their latest group accounts which were for the 12 months to the 1st January 2023, the company generated revenue of £2.176 billion and adjusted EBITDA of £321 million. Prior to the covid-19 pandemic in the financial year to 28th April 2019, Greene King generated revenue of £2.216<br /> billion and EBITDA of £482 million.<br /> <br /> In 2019, CK Asset Holdings completed the acquisition of Greene King for £2.7 billion making this one of the largest ever portfolio acquisitions in the pub sector.<br /> <br /> The lease is guaranteed by Punch Pubs & Co Limited (Company No. 03982441) which forms part of the wider Punch Pubs Group Limited company. The wider Punch Pubs & Co group currently owns in excess of 1,200 tenanted and managed pubs throughout the UK and reported turnover of £313.5 million and EBITDA of £79.1 million for the 52 weeks to 13th August 2023. In December 2021 the company was acquired by Fortress Investment Group <br /> for approximately £1.0 billion.<br><br><strong>The Market</strong><br>The leisure and hospitality sectors have continued to perform strongly as they benefit from robust consumer demand. The resilient operator performance and typical long leases have continued to drive investor demand in the sector. <br /> <br /> London continues to be recognised as one of the worlds safe havens for property investors. Its status as a leading global financial centre and as one of the most visited cities by tourists continues to drive strong investor and occupier demand seeking defensive assets which are let to strong covenants.<br><br><strong>VAT</strong><br>It is envisaged that the property will be sold as a TOGC so the transaction should therefore be exempt from VAT.<br><br><strong>EPC</strong><br>D-85<br><br><strong>Proposal</strong><br>We are instructed to seek offers in excess of £8,000,000 (4.0% NIY) assuming usual purchaser’s costs. <br /> <br /> A sale at this level would reflect a low capital value of £986 psf.<br /> <br /> The business will continue to trade unaffected from the premises during the marketing of the property and post completion of the sale.<br><br><strong>Contact</strong><br>All viewings must be made by prior appointment and under no circumstances should any direct approach be made to any of the occupational tenants staff.<br /> <br /> For further information and all viewing requests please contact the sole selling agents Savills.<br><br>