Luke Johnson – we’ve been looking at mini-golf segment for well over a year: Brighton Pier Group executive chairman Luke Johnson has told Propel it has had its eye on the mini-golf segment for “well over a year”. The company has agreed to buy Lethington Leisure, which operates Paradise Island Adventure Golf, for a consideration of £10.5m. Paradise Island Adventure Golf has six sites with two more set to open, while it is in talks over another. Johnson said Brighton Pier Group plans to take the concept nationwide and would look to open at least one site a year. He added Paradise Island Adventure Golf would retain its family focus but the company could consider opening licensed sites that were more suited to adults. Johnson said: “We think there’s plenty of growth in the mini-golf sector – it’s highly fragmented. We’ve been looking at mini-golf for well over a year. There are about 700 mini-golf sites on the whole but about 650 of those are traditional and mostly outdoor. This business operates indoor sites that are family focused and it’s going to stay that way. We would like to go national. We are going to be opportunistic when it comes to sites. The current ones are concentrated further north but we certainly see an opportunity to come south. We don’t plan to open one on the pier though – at least in the short term. The pier trades better between Easter and October while the mini-golf, being indoors, does better in the winter months.” Johnson said of Lethington Leisure: “It runs a very efficient business and has shown good growth. It’s got some attractive sites. Our covenant will help to secure more sites. It’s earnings enhancing and fits the portfolio we are looking to build.” He added the company was open to further acquisitions but “one at a time”. He said: “We need to bed this one into the business first.”
Starbucks opens Shanghai roastery as China set to become ‘bigger market than US in ten years’: Starbucks has opened a Reserve Roastery in Shanghai as it announced China could become a bigger market for the company than the US within ten years. China is the company’s fastest-growing market, with a Starbucks store launching every 15 hours. The company operates more than 3,000 stores in 136 cities in China with 600-plus in Shanghai alone, more than in any other city. The new 30,000 square foot roastery is Starbucks’ second, after the concept launched in Seattle, and mixes manufacturing processes such as coffee roasting, packaging and brewing with a cafe environment that includes China’s first Rocco Princi bakery. Visitor attractions include three coffee bars, a 3D-printed tea bar, and an augmented reality experience accessed via a mobile device. Starbucks executive chairman Howard Schultz said: “We’ve created a space that recognises and celebrates both our 46-year history of coffee leadership and retail innovation and China’s rich, diverse culture.” The Starbucks Foundation and Starbucks China also announced a social impact commitment of $20m in the country during the next five years. Belinda Wong, chief executive of Starbucks China, said: “We firmly believe it is our role and responsibility to use our scale to give back to the communities as we continue to grow in China.”
Remarkable Pubs to reopen Hackney venue this week for 14th site: London-focused Remarkable Pubs will open the 14th pub of its mainly freehold estate – The Virgin Queen in Hackney – on Thursday (7 December) following a detailed refurbishment. The Virgin Queen will feature a first partnership with local restaurant The Fish House. Continuing the community theme, limited edition beers from Hackney Brewery will be on offer, while Hackney Downs’ Square Root Soda will also be stocked. Remarkable Pubs managing director Elton Mouna told Propel: “The Virgin Queen is a veritable whirligig of Tudor splendour, classic fish and chips, beers that make you say wow, wonderful wine and terrific service.” Remarkable Pubs’ portfolio includes The Approach Tavern in Bethnal Green and The Barley Mow and The Reliance, both in Shoreditch.
James Cochran closes Islington restaurant four months after launch: Chef and restaurateur James Cochran has closed his Islington restaurant within four months of opening. The restaurant was upstairs at the Angel Shopping Centre. Cochran’s website states: “This pop-up location has now closed. Please visit our EC3 site or look out for the next pop-up.” However, when the restaurant opened in August, Cochran stated in a press release: “This prime north London location is perfect for the next stage of our expansion. Angel Central offers a diverse and vibrant mix of retail and leisure and we are thrilled to share our food with the people of Islington.” The 60-cover venue offered a “carefully curated modern British menu”, while the venue featured an open plan kitchen, cocktail and wine bar, and DJ booth with a further 20 covers on the terrace. Cochran opened his debut EC3 site at Bevis Marks in east London last year.
London-based Santi Italian Restaurant secures Watford site to start expansion: London-based Santi Italian Restaurant has secured a site in Watford to start expansion. The brand, which opened its first site in Stratford, east London, in July 2016 at East Village, the former athlete’s village for the 2012 Olympic Games, has secured a 3,132 square foot unit in The Parade, Watford, at a site formerly occupied by Tinseltown American Diner. Santi Italian Restaurant is a neighbourhood concept developed by head chef Francesco Pisani and showcases classic Italian dishes, including alternating weekly specials highlighting lesser-known meals from specific regions. Salvatore Di Natale, of agents CDG Leisure, which secured the site on behalf of Santi Italian Restaurant, said: “We are excited to aid the expansion of this fantastic authentic Italian restaurant and pizzeria.”
Manchester office block home to The Alchemist sells for £55m: An office block in Manchester city centre that is home to Palatine Private Equity-backed The Alchemist has changed hands in a £55m deal. Royal London Pension Property Fund has acquired One New York Street from Invesco Real Estate, which was advised by agents JLL. One New York Street comprises 113,256 square feet of grade A accommodation split across 13 levels, in addition to two floors of basement car parking. Its 11 occupiers include Marks & Clerk, AECOM and Turley Associates, with The Alchemist occupying a prominent position on the ground floor. James Porteous, capital markets director at JLL in Manchester, told Insider Media: “The city centre office investment market has been particularly active this year, with more than £600m already transacted.” The Royal London Pension Property Fund was represented by Ryden.
Pizza Hut tests beer and wine delivery in US: Pizza Hut, which is owned by Yum! Brands, is testing beer and wine delivery in the US. The company said it would begin delivering beer in certain cities starting in Phoenix, Arizona. Pizza Hut also plans to roll out wine delivery in January, reports CNN. Other restaurant companies in the US have turned to alcohol to boost sales. TGI Friday’s and Buffalo Wild Wings both announced earlier this year they are testing alcohol delivery, while Taco Bell has been opening more upscale Cantina locations that serve drinks such as Twisted Freezes with a shot of rum, tequila or vodka. Industry experts said delivering alcohol could help Pizza Hut differentiate itself from competitors such as Domino’s and Papa John’s. In November, Yum! Brands reported Pizza Hut’s like-for-like sales were flat in the most recent quarter.
Ivy Collection opens Granary Square Brasserie in King’s Cross: The Ivy Collection has opened its latest site – Granary Square Brasserie in King’s Cross. The company has launched the 250-cover venue in Stable Street on a site that formerly housed Bruno Loubet’s restaurant Grain Store. The space includes a lounge and 14-cover bar as well as a 110-cover restaurant. There is also a 37-cover lounge for meetings and a 73-seater terrace overlooking Granary Square and Regent’s Canal. The Ivy Collection said Granary Square Brasserie “redefined all-day dining”, offering a “welcoming place to meet, hang out, eat and drink”. A resident DJ plays each evening while the menu combines modern British brasserie-style cooking and dishes found in all-day restaurants on the American east and west coasts. Granary Square Brasserie is the first Ivy Collection site to offer online reservations.
Jidori to open second site, in Covent Garden: London-based Japanese restaurant Jidori is to open its second site, in Covent Garden. Owners Natalie Lee-Joe and Brett Redman will launch the venue in February in Catherine Street. The restaurant will be on the ground and first floors, seating about 50 diners, while the lower ground floor will feature a private dining karaoke room for 12. Head chef Shunta Matsubara will move from the debut Dalston site, which opened in 2015, to man the bespoke yakitori grill. Based on Jidori’s specials board in Dalston, Lee-Joe and Redman will extend the menu with small and large plates to sit beside traditional yakitori such as Tsukune (minced chicken with egg yolk). The Covent Garden venue will also offer an extended drinks menu of artisan sake, craft beer and classic cocktails. Lee-Joe said: “The space in Covent Garden allows us to bring the fun back into dining with our own karaoke room. Our little spot in Dalston will always be our home but moving into central London allows us to build something more exciting in Covent Garden. It’s the right move for us.”
Young Italian entrepreneur opens Roman restaurant in Knightsbridge for second London site: Italian entrepreneur Andrea Reitano, 24, has opened Roman restaurant Osteria Romana in Park Close, Knightsbridge, for his second London site. The venue offers a menu inspired by the dishes Reitano’s grandmother cooked for more than 60 years, while all the 30-cover restaurant’s produce comes direct from the markets of Rome. Dishes include gnocco alla Romana with black truffle sauce, a traditional dish rarely seen outside Rome that is made using semolina rather than potato flour. All pasta is served at table in individual padellas, with the wine list featuring varieties from across Italy. The decor features dark wood and brass and an open plan kitchen, while the walls are adorned with black-and-white photographs of Roman city life. There is also seating outside for 12. Reitano also operates Caffè Rei, an Italian cafe in Mayfair. He was also a co-investor in Mayfair restaurant Assunta Madre.
Supercity acquires Manchester aparthotel: Serviced apartment company Supercity Aparthotels has acquired The Light Aparthotel, an 81,000 square foot site in Manchester’s Northern Quarter, for an undisclosed sum. It is the latest addition to its portfolio of three London aparthotels, with openings planned for 2018 in the capital and Brighton. Supercity has acquired The Light Aparthotel as a going concern and will continue to operate with plans to refurbish and relaunch in 2018. The property is a mixed-use development of 172 apartments, 62 of which are operated as The Light Aparthotel. The property offers fully equipped studio, one and two-bedroom apartments and a range of penthouse suites across 19 floors, offering the flexibility of serviced apartments with hotel-style service. Supercity managing director Dean Madge told The Business Desk: “Manchester has rightly cemented its position as a key destination that continues to enjoy increased visitors for business and leisure trips.”
Numis Securities – Ei Group delivering cash flow and net asset value accretion: Numis Securities analyst Tim Barrett has said Ei Group is delivering cash flow and net asset value (NAV) accretion. Issuing a ‘Buy’ note on the shares with a target price of 200p, Barrett said: “Ei Group grew its NAV by 6% in FY17, solid evidence the strategy adopted in 2015 is creating shareholder value. Furthermore, we believe growing confidence in the quality of Ei Group’s assets will further help to narrow the 36% discount to tangible NAV. The £55m enhancement came from the capitalised impact of like-for-like NI growth and the transfer of underperforming tenanted assets into new managed formats as well as gains on asset disposals (£10m, or 26%). Additionally, the revaluation exercise resulted in a small £7m uplift, albeit market-related rather than company specific. The main risk to the tenanted model is licensee profitability, which ultimately impacts the rental potential of an estate. Given our concerns around costs in the managed model it is a justifiable concern that the tenanted sector might not be immune. Encouragingly, the number of unexpected business failures at Ei Group fell from 75 to 61 (or 1.3% of the estate), well below the four-year average of 144. Ei Group grew like-for-like income from beer by 3.5%, showing the health of wet-led pubs (and premiumisation). Rents were flat, somewhat counter-intuitively, but demonstrate Ei Group is taking a more measured approach than in the last cycle. Ei Group also showed reassuring progress on Market Rent Only (MRO) applications. Since legislation was introduced, 26% of qualifying pubs have made valid applications, of which half have signed a new tied deal. A total of 29% are with the adjudicator and 13% are still in progress. This gives a maximum of 12% of qualifying pubs that could end up on MRO versus 17% at the first half stage. Note Ei Group only has about one-third of its estate on long-term tied leases and this is expected to reduce by 10% per annum. Ei Group’s leverage remains full but appropriately structured in our view, with loan to value of 55% (net debt/Ebitda of 7.4 times, interest cover 1.9 times). For FY18, we forecast free cash flow of £106m, which is sufficient to cover scheduled amortisation of £81m and leaves headroom to fund the £20m buyback. Retiring equity at a material discount to NAV is logical in our view but means the degearing will be circa 0.2 times in FY18. Ei Group has outperformed the FTSE All-Share Index by 17% in the year to date and 8% since reporting full-year results. It is one of our top sector picks as we see the 36% discount to tangible NAV as overdone, expect the estate repositioning to unlock further value, and are reassured bear concerns are proving overdone.”
Manchester-based Eclectic Hotels transforms King Street Townhouse restaurant in response to ‘changing market trends’: Manchester-based Eclectic Hotels, which is owned by Eamonn and Sally O’Loughlin, has transformed its King Street Townhouse restaurant into an “all-day dining destination” in response to “changing market trends”. The Tavern now features a new layout, custom-made furniture and luxury soft furnishings. Covers have been reduced from 36 to 32 and marks the latest milestone for King Street Townhouse, which opened in a 19th century Italian Renaissance building in the Upper King Street Conservation Area in December 2015. The 40-bedroom boutique hotel also offers meetings and events space, a south-facing terrace, private dining and cinema space The Cellars, and a rooftop spa. Eclectic Hotels managing director Richard Kwiecien told Insider Media: “This is the all-day dining destination Manchester has been waiting for.” Eclectic Hotels also owns Eleven Didsbury Park and Didsbury House Hotel in south Manchester and Great John Street in the city centre.
Douglas Jack – scale of Cineworld’s equity raise in Regal acquisition will cause shareholders short-term indigestion: Peel Hunt leisure analyst Douglas Jack has said the scale of Cineworld’s equity raise in its acquisition of Regal Entertainment Group will cause indigestion for shareholders in the short term. Issuing a ‘Hold’ note on the shares with a target price of 600p, Jack said: “Cineworld is funding the acquisition through £3bn of new debt and a £1.7bn equity raise by way of a rights issue, including a commitment to full subscription from Cineworld’s 28% shareholder, Global City Holdings, which is owned by Cineworld’s chief executive and chief operating officer. Regal’s Ebitda is forecast to fall to $611m in 2017 and rise to $656m in 2018E, with earnings per share falling to $0.91 in 2017 and rising to $1.04 in 2018E. Thus, $23 per share equates to 9.4 times EV/Ebitda 2017E). It also equates to a price-to-earnings ratio of 24.1 times 2017E and 21.7 times 2018E. This compares with Cineworld’s 2018E valuation of 8.0 times EV/Ebitda and price-to-earnings ratio rating of 13.0 times. We estimate combined Ebitda should reach £800m if synergies reach $150m (£112m), with Ebit at circa £575m and profit before tax at £375m. Pro-forma, the equity value (£3.2m) is ten times estimated profit after tax, and the EV (£6.3m) is just under eight times our estimated Ebitda. We estimate the deal is circa 30% earnings accretive, reflecting the scale of the annual synergies ($100m per annum), structural benefits ($50m per annum), re-leveraging (from circa one times to four times net debt/Ebitda) versus transaction costs (circa £0.1bn) and acquisition price (8.7 times Ebitda). Cineworld said it ‘would only proceed with the potential transaction in circumstances and on terms which it believes would be accretive to shareholder value’. It has lived up to this promise, providing a step-change in profitability and cash flow. However, the long-term investment proposition has fundamentally changed as a result of higher debt and earnings becoming heavily dominated by mature markets. In the short term, we would expect the scale of the equity raise to cause indigestion.”
Everyman signs to anchor Lincoln leisure scheme: Everyman Cinemas has signed to anchor Lincolnshire Co-op’s retail and leisure scheme, the Cornhill Quarter in Lincoln. The 270-capacity, 12,000 square foot cinema will feature four screens, with the company joining a site for Loungers’ Cosy Club, Danish home and general store Flying Tiger Copenhagen, and suit hire company Moss Bros. The grade II-listed Corn Exchange will house five brands in total. Everyman chief executive Crispin Lilly told Property Week: “We believe Everyman Cinemas will complement this scheme perfectly.” Lincolnshire Co-op chief executive Ursula Lidbetter added: “This is an important step in moving towards our vision of delivering an exciting range of shops and restaurants suitable for the local catchment area and wider region.”
Lake District-based operator acquires 19th century manor house hotel for £1.35m: Lake District-based operator Mawdsley Bleachers has acquired Ravenstone Manor hotel in Keswick, Cumbria, off an asking price of £1.35m. The family-run company, which operates a number of hotels in the region, bought the property from Martin Oakley in a deal brokered by agents Christie & Co. The hotel offers 20 recently refurbished en-suite bedrooms, a restaurant, lounge, bar and games room, as well as separate owners’ accommodation and a holiday let cottage. It is set in three hectares of gardens with spectacular views of Bassenthwaite Lake and the surrounding countryside. Ravenstone Manor was built as a Dower house for Lady Charlotte Howard in 1860 as a place of rest and relaxation. The property was restored and updated by Oakley, who made the decision to sell the hotel to relocate closer to family. Keith Stringer, associate director at Christie & Co, told the News & Star: “The acquisition was the next natural purchase for the continued expansion of the family’s highly successful hotel and leisure enterprise.”