birmingham city final 210406.pdf · a significant factor in the resurgence of birmingham has been...

Misrepresentation Act 1967: Ashworth Sibal Welch (ASW) for themselves and the vendors of the property whose agents they are give notice that:

1: These particulars are a general outline only, for the guidance of prospective purchasers and do not constitute the whole or any part of an offer or contract:2: ASW cannot guarantee the accuracy of any descriptions, dimensions references to condition, necessary permissions of use and occupation and other details contained herein and therefore prospective purchasers much not rely on them as

statements of factor representations and must satisfy themselves as to accuracy:3: ASW or their employees do not have any authority to make or give representation Or warranty or enter into any contract whatever in relation to this property:4: Rents and prices quoted may be subject to VAT in addition:5: ASW will not be liable in negligence or otherwise for any loss arising from the Use of these particulars:6: No responsibility can be accepted for any expenses occurred by intending purchasers in inspecting properties which have been sold or withdrawn:7: ASW have not made any investigations into the existence or otherwise of any issues concerning pollution, potential land, air or water contamination. The purchaser is responsible for making their own enquiries in the regard.

Designed & Produced by KUGEL | 020 7478 8300 | www.kugel.co.uk | April 2006 | K8031

B I R M I N G H A M

For further information or to arrange an inspectionplease do not hesitate to contact:

James Welch 020 7534 [email protected]

Arun Sibal020 7534 [email protected]

Jonnie Ray020 7534 [email protected]

Prime Freehold Leisure Park Investment

B I R M I N G H A M

Investment Summary 3

Location: Birmingham 4

Birmingham: The City 7

Demographics 8

Situation 10

The Site 11

The Scheme 12

Birmingham Leisure 13

Planning/Construction 14

Accommodation 15

Floor Plans 16

Centre Management/Service Charge 18

Principal Operators 19

Asset Management Potential 22

Income Summary & Analysis 24

Proposal 25

Tenancy Schedule 26

2 | StarCity

Photograph taken 2001

StarCity | 3

Investment Summary

Birmingham is the UK’s second city with a population of

approximately 1 million people rising to over 6 million within

a 60 minute drivetime.

Birmingham has an above national average representation

of 15-24 year olds.

The property occupies a highly prominent position adjacent

to the M6 motorway at Junction 6 (Spaghetti Junction).

Star City is one of the largest entertainment and leisure

complexes in the UK boasting the UK’s largest multiplex

cinema & Europe’s largest casino. The property, which

totals approximately 37,119 sq m (399,549 sq ft ), also

comprises bowl, health & fitness, entertainment centre,

outdoor soccer pitches(under construction), with an

additional 23 bar, restaurant and retail units.

There are 2,470 parking spaces equating to 1:14.8 sq m

(1:159 sq ft ).

A freehold, strategically located site totalling 9.13 hectare

(22.56 acres)

Let to 23 tenants on 28 principal leases producing a total

net income of £5,699,595.36 p.a.

Six vacant units totalling 3,215 sq m (34,606 sq ft) with

1,084 sq m (11,663 sq ft) under offer.

78% of gross income is secured for at least 19 years.

80% of gross income is secured against covenants rated

by Dun & Bradstreet as minimal or low risk.

55% of gross income provides for minimum or fixed rental

uplift at the next review and 23% at reviews throughout

the term.

Extensive asset enhancement potential.

Offers sought in excess of £90,000,000 which reflects the

following minimum yield profile after allowing for usual

purchaser’s costs of 5.7625%.

Initial Yield 5.99%

On settlement of Tenpin Review

(assuming £11.00 per sq ft) 6.07%

June 2007 6.15%

October 2010 6.59%

Equivalent Yield 6.80%

4 | StarCity

Location:Birmingham

Birmingham is the UK’s second city and is the commercial,

administrative and cultural capital of the West Midlands

region which has a population of 5.3 million. The city itself

has an estimated population of close to 1 million.

Birmingham is strategically located at the centre of the UK’s

communications network. It lies 190 km (118 miles) north of

London, 141km (88 miles) north east of Bristol, 140km (87

miles) south east of Manchester and 191km (119 miles)

south west of Leeds.

Due to its strategic location, communications by Road, Rail

and Air are excellent.

Road

Birmingham is at the heart of UK’s motorway network with

links to the M5, M6 and M42, which connect to the M1, M40

and M69. The A38 (M) Aston Expressway provides direct

access from Junction 6 M6 to the edge of the city centre.

Star City is located at this motorway junction.

Birmingham City Centre has a nationwide hub for National

Express Coaches.

The M6 Toll, Britain’s first toll motorway was opened in

December 2003 shortening journey times through the West

Midlands and alleviating congestion within the conurbation.

Rail

Birmingham has three mainline stations: New Street, Snow

Hill and Birmingham International.

Birmingham New Street has more direct connections than

any other station in the UK and is the busiest station in

Europe, dealing with 1,250 passenger trains per day.

Journey time to London is 84 minutes.

Midland Metro Light Rail transport system runs from

Wolverhampton to Snow Hill in the city centre. There are

plans to extend the system including a possible route which

would pass Star City.

Air

Birmingham International Airport is one of the UK’s fastest

growing airports, handling over 9.3 million passengers

in 2005.

The airport provides services to 60 destinations worldwide.

It also has a dedicated airfreight terminal.

“The public/private sectorpartnerships we have withinBirmingham… £13billion worth of investment planned.”Mike Whitby, Leader of Birmingham City Council

StarCity | 5

“Anyone visiting Birmingham today finds a modern, vibrant city witha tremendous history and a real sense of confidence about the future.”Tony Blair, Prime Minister

6 | StarCity

“Birmingham has a quality of life ahead of Rome, Dubai, Pragueand Hong Kong.”Mercer Human Resource Consulting, World Wide Quality of Living Survey, 2005

StarCity | 7

Birmingham: The City

Birmingham is a regional shopping centre with total retail

floorspace estimated at over 301,000 sq m (3.24m sq ft)

ranking it number 1 of the 200 PROMIS centres. It ranks 3rd

out of the PROMIS centres in terms of shopping population.

A significant factor in the resurgence of Birmingham has

been the development of The Bullring shopping centre. It is

Europe’s largest city centre regeneration scheme and

includes the iconic Selfridges building and Debenham’s

new concept store.The Bullring attracts 600,000 visitors a

week and in the first 12 months of opening, 36.5 million

people passed through the centre.

Further shopping centres include The Mailbox which

provides upmarket fashion including Harvey Nichols; the

Pallasades adjacent to New Street Station; Pavilion Central

and Martineau Place.

Retail warehousing in Birmingham totals just over 232,250

sq m (2.5m sq ft) dominated by the Fort Shopping Park,

which is located just 2.7km (1.5 miles) from Star City along

Heartlands Parkway (A47).

Birmingham has progressed from its traditional

manufacturing base, to become a major UK and

International centre for business, commerce and industry.

The city has representation from many UK, Investment and

Overseas banks, over 500 law firms and is Europe’s second

largest insurance market. The UK’s top accountancy and

management consultancy firms have their largest offices

outside London in Birmingham.

8 | StarCity

Demographics

Birmingham has a resident population of

approximately 970,892 (Census 2001), with an

extensive primary catchment area which

extends beyond Sutton Coldfield in the north,

and constrained by Merry Hill, Walsall and West

Bromwich to the west, Tamworth to the north-

east, Solihull to the south and Coventry to the

south-east.

CACI estimates that Birmingham has a resident

population of approximately 1,277,486 people

within 20 minutes drive time rising to 2,793,082

within 30 minutes and 6,184,707 within 60

minutes (2001 census). Within these drive time

population figures there is an above national

average of young adults aged 15-24, one of the

most important age groups in terms of leisure

spend. Within the 60 minute contour there is an

above average population within the profiles

“Educated Urbanites” and “Aspiring Singles”

together with “Wealthy Executives” and

“Flourishing Families”.

Birmingham is flourishing and is internationally

recognised as a leader in leisure and

entertainment along with business, shopping,

industry and sport. It also has developed a

reputation as ‘Europe’s Meeting Place’ attracting

over 40% of the UK’s hotel conference trade. In

addition, Birmingham is home to three universities

which, combined, have over 50,000 students.

% of PopulationCACI Area

Wealthy Executives

Affluent Greys

Flourishing Families

Prosperous Professionals

Educated Urbanites

Aspiring Singles

Settled Suburbia

Prudent Pensioners

Post-Industrial Families

Base

0 5 10

BIRMINGHAM

STOKE ON TRENT

COVENTRY

LEICESTER

Northampton

Worcester

Tamworth

Cheltenham

Shrewsbury Telford

Burton Upon Trent

Rugby

Stafford

Redditch Leamington Spa

Stratford Upon Avon

Kidderminster

NOTTINGHAM

DERBY

M6

M6

M6

M6

M1

M1

M69

M5

M42

M5 M40

M50

M42

M54

M42

M6 Toll

20 minute contour (1,277,486 residents)



StarCity | 9

SituationStar City occupies a highly prominent and

visible position adjacent to the M6 motorway at

Junction 6 (Spaghetti Junction). It lies

approximately 4km (2.5 miles) north east of

Birmingham City Centre via the A47 Nechells

Parkway, which forms part of the Heartlands

Spine Road.

Vehicular access is direct from Junction 6 of the

M6 via Lichfield Road (A5127) and Cuckoo Road

(B4137). There is also a bus service from the

city centre.

Birmingham Fort Retail Park lies within 2.7km

(1.5 miles) to the east along Nechells Parkway

and Costco operate a Cash and Carry opposite

Star City on Watson Road.

Construction of the Birmingham Heartlands

Spine Road, connecting the city centre with the

traditional industrial and commercial areas, has

paved the way for redevelopment and

improvement of this important location. Star City

37,119 sq m (399,549 sq ft), Costco and

Birmingham Fort Shopping Park 23,690 sq m

(255,000 sq ft) have contributed significantly to

this regeneration. Another major development

underway is the iconic Fort Dunlop, by Urban

Splash, which is being turned into a mixed use

scheme including 27,870 sq m (300,000 sq ft)

offices with 4,180 sq m (45,000 sq ft) retail and

leisure and a 100 bed Travelodge Hotel.

Completion is due end 2006.

10 | StarCity

ARGYLE ST.

B4137

WATSON ROAD W

ALK

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M6

WHAR

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CUCKOO ROAD B4137

COSTCO

HEARTLANDS PARKWAY

RIVER TAME

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RIVER REA

BIRMINGHAM AND FAZELEY CANAL

StarCity | 11

The Site

Star City occupies a level site totalling approximately 9.13

hectare (22.56 acres).

The property is constructed on the site of the former

Nechells Power Station and Electricity Generating Station

which was decommissioned and demolished in 1988.

Environmental assessments were undertaken prior to the

development of the site by Ove Arup & Partners and we

understand all required remedial action was undertaken.

The vendor has commissioned RPS Health Safety and

Environment to undertake an environmental review of the

site. They have concluded that on the basis that the site is

to remain in its current use and form, the overall

environmental risk is considered to be low to moderate.

Full details are available and the benefit of this assessment

will be warranted to the purchaser.

Switch House

The Nechells B Switch House currently remains on site

adjacent to the east elevation of the main building. This has

now been decommissioned and is redundant providing an

opportunity for redevelopment.

BIRM

INGHAM

AND FA

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Y CANAL

TAME VALLEY CANAL

A5127

LIC

HFIELD

ROADTYBURN ROAD

SALF

ORD

CIRCUS

B4137 CUCKOO ROAD

A47 HEARTLANDS PARKWAY

NEC

HEL

LS P

AR

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OA

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CHURCH

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SLA

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ASTON HALL ROAD

ELE

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WOOD END ROAD

GRAVELLY

HIL

L

KINGSBURY ROAD

A38(M) ASTON EXPRESSWAY

LON

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CR

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M6 M6

HOLBORN HILLNECHELLS

RIVER REA

GR

AN

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JUNCTION 6

WATSON ROAD

JAR

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WAY

Star City is one of the largest entertainment and leisure

complexes in the UK. It opened in July 2000 and provides

approximately 37,119 sq m (399,549 sq ft). It is the prime,

family orientated, leisure destination for Birmingham and

its catchment.

The scheme totals 29 units, comprising:

• UK’s largest multiplex cinema, 30 screens

– Vue Cinemas

• 24 lane bowl – Tenpin

• Health and Fitness club – Holmes Place

• Europe’s largest Casino – Stanley Casinos

• Entertainment Centre

• Retail

• Bars and Restaurants

• Mini ski slope, Air Park, Climbing Wall and

Trampoline Park

• 2,470 parking spaces

• 10 all weather soccer pitches

(under construction)

The scheme itself centres around an impressive atrium

accessed via two partially covered entrance-ways thereby

maximising the external frontages of most of the units. The

majority of the units are accessed from the ground floor

whilst the cinema and six further units are situated at first

floor level with access via escalators, lifts and stairs.

A multi-storey car park adjoins the eastern elevation of the

property providing 1,078 spaces.

The top floor of this car park is currently being re-

developed as 10, all-weather, 5-a-side football pitches to

be operated by Goals Soccer Centres plc. A new lease has

been signed on this space together with part units 18/19 and

part 20/21 for a sports bar. Visit www.goalsfootball.co.uk for

information about this operation.

Servicing to the property is provided to the rear and side of

the building in the main, with access leading from

Watson Road.

There are also regular promotions and events held at Star

City, including:

Cirque du Soleil

Cirque du Soleil hosted its internationally renowned

“Saltimbanco” show on its first ever visit to Birmingham.

They stayed for 4 weeks and attracted over 80,000 visitors.

Cirque du Soleil committed to undertaking a £1 million

marketing campaign and to promote the centre as part of

this. Visitors came from a distance of over 100 miles.

Circus

Star City is well established as a venue for hosting a circus

at Christmas, having previously featured Zippos, Cottle &

Austen and latterly Moscow State Circus in 2005. The latter

paid a rent of £4,000 and a contribution of £10,000 towards

marketing. The Chinese State Circus is planned for

Christmas 2006

Scream

This is Birmingham’s largest Fun Fair and is held annually at

Star City paying a rent of £10,000 and committing to

undertake marketing.

Events

There are a number of other event promotions, radio

promotions, film launches which maintain and enhance the

leisure offer at Star City. Past events include a Beach Party

with Peter André which attracted 10,000 people on the

Sunday alone.

TenureFreehold

12 | StarCity

The Scheme

StarCity | 13

Birmingham LeisureLeisure in Birmingham

Within the Birmingham region there are a

number of stand alone multiplex cinemas and

leisure parks providing varying levels of offer.

Star City is the largest and most comprehensive,

multi-facility leisure scheme offering free car

parking and is the premier family

leisure destination.

The city centre’s leisure offer is mainly centred

on Broad Street and Brindley Place. The former

is predominantly a young person’s alcohol-led

circuit although there is also the Fiveways

Leisure Scheme, anchored by Cineworld,

located at its western end. This scheme which

also provides mainly alcohol led offers at ground

floor, benefits from a multi-storey car park

although there is a charge.

Brindley Place and the Mailbox are more

upmarket and provide both high fashion retail,

restaurants, hotels and bars. The former is also

a major urban office campus.

Broadway Plaza on Ladywood Middleway is

anchored by an AMC 12 screen multiplex,

Bowlplex and casino and has yet to prove

successful. There is also a charge for car parking.

The Arcadian centre provides further bars and

restaurants and also forms Birmingham’s

Chinese quarter. The scheme was anchored by

a UGC cinema, which has now closed down.

M40

M42

M5

M6

BIRMINGHAM

ASTON

WESTBROMWICH

LONGBRIDGE

STECHFORD

SUTTONCOLDFIELD

WEDNESFIELD

DUDLEY

SOLIHULL

HOCKLEYHEATH

TEMPLEBALSALL

REEVESGREEN

BRIERLEYHILL

WALSALL

BODYMOORHEATH

COLESHILL

1

1

23

7

6

5 4

3

5

2

4

City Centre1 Broad Street/ Brindley Place

2 Arcadian

3 Broadway PlazaAMC, Broadway Casino, Virgin Active, Frankie & Benny’s, Subway, Domino’s Pizza, Bowlplex

4 FivewaysBella Pizza, Grosvenor Casino, Hard Rock café, Henry J Bean’s, Nando’s,Revolution, Cineworld, Cineworld, Waxy O’Conners

Out of Town Leisure Parks5 Birmingham Great Park

Chiquito, Frankie & Benny’s, Gala Bingo, Greens, Hollywood Bowl,Homespread, Jigsaw Nursery, Premier Travel Inn, Cineworld

6 Castle Gate DudleyBowlplex, Frankie & Benny’s, McDonalds, Nando’s Chicken, Pizza Hut,Showcase, Tom Cobleigh

7 Bentley Bridge, WednesfieldCineworld, Healthlands Gym, KFC, McDonalds, Pizza Hut, Tom Cobleigh, Diva

Cinemas1 Showcase Kinsbury Road, Erdington

2 UCI Tamworth

3 Showcase Walsall

4 Cineworld, Solihull, Touchwood Court

5 UCI Merry Hill Dudley

14 | StarCity

Planning Construction

Outline planning permission was granted by

Birmingham Heartlands Development

Corporation on 30th April 1997 for:

“Redevelopment of the former Nechells Power

Station including part demolition of Nechells B

Switch House, for 30,205 sq. m. net lettable

floor space of major leisure and entertainment

facilities (Class D2 and A3), 2,325 sq. m. net

retail floorspace for Class A1 use (non-food),

associated infrastructure, including the

provision of integrated public transport facilities

for coach visitors, bus and metro users together

with about 2,750 car parking spaces and the

erection of a petrol filling station”.

Approval of Reserved Matters was granted on

10th March 1998 and 24th March 1998.

The property was constructed in 2000 in joint venture between

Richardson Developments and Carillion plc, working in

partnership with Birmingham Heartlands Development

Corporation and Birmingham City Council.

The property is constructed around a steel frame

superstructure supported on piled foundations, with eaves

heights varying from 12-25 metres. The principal elevations are

decorative, consisting of textured multi-coloured facing

blockwork, multi-coloured glazed blockwork and textured

acrylic render. The rear and side elevations are clad in profiled

metal sheeting. Roofs are multi-levelled of curved and

flat construction.

The multi-storey car park is constructed of steel frame,

predominantly galvanised, with pre-cast concrete decking.

A warranted building survey carried out by Chisholm Nurser

Partners (CNP) will be available to the purchaser.

StarCity | 15

Accommodation

The property has been referenced by Plowman

Craven Associates for which a warranty is

available to the purchaser.

The property has a total gross internal floor area

of 37,119 sq m (399,549 sq ft ). It comprises a

30 screen Multiplex Cinema, 24-lane Bowl,

Casino, Entertainment Centre, Health and

Fitness Club, 10 all-weather, 5-a-side soccer

pitches (under construction), together with 23

bar, restaurant and retail units. There are

currently 5 vacant units totalling 3,215 sq m

(34,606 sq ft), one of which, totalling 1,084 sq m

(11,663 sq ft) is under offer.

Parking is provided for approximately 2,470 cars

including 1,078 within the multi-storey car park.

There are also 10 coach spaces.

A full breakdown of floor areas is provided

within the Accommodation and Tenancy

Schedule to the rear of this brochure.

A summary is provided below:

Sq m Sq ft % of total

Cinema 11,310 121,749 30.5

Bowl 3,545 38,162 9.6

Health & Fitness 4,805 51,716 12.9

Casino 4,144 44,597 11.2

Entertainment Centre 600 6,457 1.6

Bar/ Restaurant/Retail 12,715 136,868 34.2

Total 37,119 399,549 100.0

TENPIN BOWLING

MVCENTERTAINMENT

MADHOUSE

SCOTTISH &NEWCASTLE PLC



BOOKS ETC

CAR PARKSW

ITC

H H

OU

SE

UNIT27

UNDEROFFER

UNIT 18/19

GOALS

HOLMES PLACE

OLDORLEANS

CLAIREí SACCESSORIES

CAFEYUSEF’S

NANDO’S

BAR MED

PIZZA HUT

MAPOTTER’S

STANLEY CASINO

STANLEYCASINO

KIOSK2

THAT MEXICAN PLACE

BURGER KING

VACANT AND UNLET UNITS

LET UNITS

16 | StarCity

Ground Floor Plan


UNIT 27UNDER OFFER

FUNSTATION

UNIT24

KIOSK5

STANLEY CASINO

LA TASCA BAR MED

VUE CINEMAS

SHOBHA’S

UNIT 21 GOALS

GOALS

VACANT AND UNLET UNITS

LET UNITS

SW

ITC

H H

OU

SE

StarCity | 17

First Floor Plan

18 | StarCity

CentreManagement Service Charge

The service charge year runs between 1st January and 31st

December. For the year ending 31st December 2004 the

service charge amounted to £1,543,758.17 and the draft

audited service charge to December 2005 amounted to

£1,541,272. The budget for the current year (2006)

is £1,631,300.

Estimated long term current service charge shortfalls as a

result of an inclusive rent on Units 9 and K3, amounts

to £35,409.85.

There is a programme of ongoing works which have been

highlighted in the building survey carried out by Chisholm Nurser

Partners. These have been broken down into immediate, short

and long term. All items and costs will be recoverable through

the service charge.

Star City is controlled from a management suite

located on the ground floor. There is a Centre

Manager and Marketing Manager directly

employed by the vendor.

All other staff are employed under the various

maintenance contracts.

The two directly employed staff would be

transferred under TUPE Regulations.

All costs are recoverable through the

service charge.

Further details are available on request.

StarCity | 19

Principal Operators

Vue Cinemas Limited

Vue Cinemas Limited was formed in May

2003 following the acquisition of Warner

Village Cinemas UK Limited by Spean

Bridge Cinemas. In 2004, Vue acquired

Cinemark and in 2005 they acquired

Ster Century.

Vue currently operate 56 cinemas with a

total of 556 screens throughout the UK.

They are the largest operator of modern

multiplex cinemas in the UK and have the

second largest market share in terms of box

office receipts. A summary of their most

recent results is set out below:

Vue Entertainment Holdings (UK) Limited

(Guarantor)

December November

2004 2003

Turnover £169.4 million £90.6 million

Pre-tax profit £4.6 million £6.2 million

Net worth £121.2 million £120.6 million

20 | StarCity

Principal Operators

Scottish and Newcastle plc

Scottish and Newcastle are a Footsie 100

company and one of the largest brewers in

the world. The company operates in 15

countries in Europe & Asia and exports to

over 80 countries around the world. Its

brands include John Smith, Courage,

Newcastle Brown Ale and Theakstons as

well as having licencing arrangements with

a number of continental brands.

A summary of their most recent results is

set out below:

Scottish and Newcastle plc

December December

2005 2004

Turnover £3.9 billion £3.7 billion

Pre-tax profit £392 million £358 million

Net worth £3.0 billion £2.73 billion

Stanley Casinos Limited & Stanley

Leisure plc

The company operates casinos such as

Crockfords in Curzon Street and the Palm

Beach in Mayfair as well as 40 provincial

casinos. In total the company operates 44

casinos (4 London, 40 in the provinces).

In 2005 the retail betting operation was sold

for £504 million to essentially leave a pure

casino company.

A summary of the most recent results is set

out below:

Stanley Leisure plc

2005 2004

Turnover £2.07 billion £1.65 billion

Pre-tax profit £52.9 million £48.5 million


StarCity | 21

Holmes Place Holdings Limited

Holmes Place operate 47 health & fitness

clubs in the UK as well as clubs in

Continental Europe and in the USA.

In 2003 Holmes Place was taken private in

a recommended offer made by Rothschild &

Sons Limited on behalf of Health Club

Group plc, a company effectively controlled

by funds managed by Bridgepoint Capital

Limited and Permira Advisors Limited.

Holmes Place Holdings Limited

December December

2004 2003

Turnover £1.64 million £2.19 million

Pre-tax loss £25.13 million £34.74 million


Tenpin Limited

Tenpin Limited, formerly Megabowl, operate

out of 39 sites throughout the UK.

A summary of the most recent results are

set out below:

Tenpin Limited

December December

2004 2003

Turnover £64 million -

Pre-tax profit £5.08 million -


StarCity | 22

Asset Management Potential

In the past Star City had mixed fortunes and arguably

suffered from having too many alcohol-led uses, which,

being predominantly a family orientated destination and

car-borne, led to conflict of uses. A number of these units

have now closed and the vendor has addressed this by a

letting to Stanley leisure plc for a 65,000 sq ft (including

mezzanines) casino together with other lettings including

the Family Entertainment Centre, then repositioning and

moving towards a more family orientated offer through; the

hosting of events such as Cirque du Soleil and other events

which draw from a wide catchment, the establishment of

family attractions in the atrium together with the events and

promotions hosted throughout the year.

The completion of the 10 all-weather soccer pitches to be

operated by Goals Soccer Centres plc will further add to

the attraction of Star City as a family leisure destination. It

has already stimulated interest from retailers and leisure

operators as a result.

Star City still offers considerable scope for asset

management and enhancement together with further

development potential:

General

Progress the Tenpin rent review where we consider there is

the opportunity to increase the rent on this unit. At the rent

quoted by the vendor of £11 per sq. ft. there would be an

immediate uplift of £78,817 p.a.

Complete new lettings currently under offer and negotiate

outstanding rent reviews and lease renewals.

Progress new, agreed, 10 year lease to Signature Outdoor

Limited for advertising hoarding, currently subject to planning,

which will produce a further annual income of £64,000 pa.

Reduce long term service charge shortfall

through renegotiation.

Improve tenant mix between leisure and retail and increase

the family led retail offer.

Progress interest from leisure operators and retailers

following the letting to Goals Soccer Centres plc.

Megabowl

This unit is one of their top trading bowling centres. They

have expressed interest in taking a lease for part of unit 10.

Cinema

Currently, in terms of trading Vue Starcity ranks in the top

25 cinemas in the UK. Having originally opened with only

20 of the 30 screens, Vue have recently opened a further 5

screens . A number of these are dedicated predominantly

to “Bollywood” films which has proved extremely popular.

Restaurants

There is only one ethnic restaurant within Star City. We

would expect a leisure scheme of this size within such a

diverse catchment population would have representation

from a greater variety of food offers. We consider there is

the potential to improve the variety of food offer to attract a

wider audience.

Atrium

The Atrium is cold and does not encourage customers to

dwell. There is an opportunity to provide some form of heating

or air handling to this area which we consider will improve the

atmosphere and increase the dwell time of customers.

Scottish & Newcastle

Scottish & Newcastle plc have leases on units 13, 16 and

22/23. They are currently unoccupied. There is an

opportunity to negotiate a surrender of these leases at a

premium with a view to re-letting to more family orientated

restaurant or retail operators ( subject to planning ).

Police Lodge

This building, which is at the entrance to the scheme, is

currently unoccupied but could be let for leisure or retail

use ( subject to planning).

StarCity | 23

Future DevelopmentSwitch House

This two storey building which is located adjacent to the

east elevation of the main building, is currently unoccupied,

having recently been decommissioned. The lease is in the

process of being surrendered. The building would lend itself

to redevelopment for a number of uses including specifically

hotel use (subject to planning).

Casino

Preliminary discussions have been held with Stanley

Casinos regarding the potential to create a considerably

larger “super casino” following the anticipated relaxation of

legislation. Stanley have expressed interest in this proposal,

which would incorporate the majority of the first floor

(excluding cinema). The requirement for a hotel could be

accommodated by the redevelopment of the Switch House.

Retail

There is potential to create a substantial unit within the

scheme, totalling approximately 10,683 sq m (115,000 sq ft)

at ground floor with a further 5,027 sq m (54,110 sq ft) at

first floor. This would incorporate units 13 to 21 and the

Holmes Place demise at ground and first floor together with

first floor units 25,26, and 27. This provides a significant

opportunity to create a destination retail unit (subject to

planning and vacant possession).

“I was astonished how beautiful Birmingham was.The buildings, the art, the use of water. It is an extraordinaryjewel of a city…I was bowled over when I was there.”Bill Clinton, US President 1992 – 2000

Photograph taken 2000

24 | StarCity

Income summary and Analysis

Income Review and Analysis

The total current gross rental income produced by the scheme

is £5,735,004.36 p.a. broken down as follows:

Core Income (inc. rent guarantees) £5,545,779.36 p.a.

Additional Income £149,225 p.a.

Events/ Promotions/ Miscellaneous £40,000 p.a.

Less; Service charge Irrecoverables £35,409 p.a.

Net Income £5,699,595.36 p.a.

The total current net rental income is therefore

£5,699,595.36 p.a.

Income Risk Profile

Income Risk Analysis

• 78% of the gross income is secured for a minimum of 19 years.

• 80% of the gross income is secured against covenants rated

by Dun & Bradstreet as minimal or low risk.

• 55% of the gross income provides for minimum rental uplift

at the next review.

• 23% of the gross income provides for minimum uplifts

throughout the term.

• Rental guarantees will be put in place for 18 months on the

vacant space representing 11.6% of the total gross income.

Term Certain Analysis

VAT

The vendor has elected to waive the exemption

to VAT and, as such, VAT will be payable on the

purchase price.

CAPITAL ALLOWANCES

We understand that no capital allowances have

been claimed for this property. A desktop

estimate of the potential allowances suggests

that in the region of £8,000,000 to £10,000,000

is likely to be available, although potentially this

could be as much as £16,000,000. The benefit

of these capital allowances are available by

separate negotiation.

63%17%

3%

3%

2%2%

10%

68%

4%

4%

3%

1%

10%10%

Minimal risk

Low Risk

Slightly greater than average risk

Significant risk

Private Individuals

Rental guarantee

Additional Income

Years

> 20

15 – 20

10 – 15

5 – 10

< 5

Rental guarantee

Additional Income

“UK Casino industry isforecast to be worth £2.5billion by 2009, representing217% growth over a sevenyear period.”KPMG

StarCity | 25

Proposal

X-Leisure is seeking offers in excess of

£90,000,000 (ninety million pounds) for the

benefit of their freehold interest in the property.

On the basis of minimum or fixed uplifts and

that the vendor will provide an 18 month rental

guarantee on the vacant units, a purchase at

this level will show the following yield profile:

Initial Yield 5.99%

On settlement of Tenpin Rent Review

at £419,782 pa 6.07%

June 2007 6.15%

October 2010 6.59%

June 2012 6.65%

October 2015 6.84%

June 2017 6.96%

October 2020 7.12%

Equivalent Yield 6.80%

True Equivalent Yield 7.08%

Contact

For further information or to arrange an

inspection please do not hesitate to contact:

James Welch

020 7534 0993

[email protected]

Arun Sibal

020 7534 0992

[email protected]

Jonnie Ray

020 7534 0994

[email protected]

26 | StarCity

Core Income

Address Description Tenant D & B Rating Lease Term Rent Reviews

CINEMA1ST FLOOR

Multiplex Cinema30 screens6229 capacity

Vue Entertainment Limited. (Company No. 04699504)t/a VueVue Entertainment Holdings (UK) Limited (Guarantor) (Company No. 3812508)Vue Properties Limited (AGA)

2A2

5A1 25 yrs from 27/06/200027/06/201027/06/201527/06/2020

UNIT 1AGROUND

RestaurantYousef Bahar

t/a Star BitesN/A 15 years from 27/01/05 27/01/2010

27/01/2015

UNIT 1BGROUND & 1ST FLOOR

BarSFI Group plc (Company No. 946949)

t/a Bar MedN/A 25 years from 24/06/2000

24/06/200524/06/201024/06/201524/06/2020

UNIT 2GROUND

Restaurant

200 covers

Nando’s Chickenland Limited (Company No. 2580031)

t/a Nandos4A2 25yrs from 24/06/2000

24/06/200524/06/201024/06/201524/06/2020

UNIT 3GROUND

Restaurant

150 covers

Chargrill Limited (Company No. 3522163)

t/a Ma Potter’s

Ma Potter’s Limited (Guarantor) (Company No. 3092239)

H3

2A1

25yrs & 3 months from24/06/2000

24/06/200524/06/201024/06/201524/06/2020

UNIT 4GROUND

Restaurant

170 covers

Pizza Hut (UK) Limited (Company No. 01072921)

t/a Pizza Hut5A1 25yrs from 24/06/2000

24/06/201024/06/201524/06/2020

UNIT 5/6GROUND

CasinoStanley Casinos Limited (Company No. 1819689)

Stanley Leisure Plc (Guarantor) (Company No. 1519749)

5A1

5A125yrs from 24/06/2002

24/06/200724/06/201224/06/201724/06/2022

UNIT 7GROUND

Restaurant

180 covers

That Mexican Place Limited (Company No. 3059723)

t/a That Mexican Place LimitedB3 25yrs & 3 months from

24/06/2000

24/06/200524/06/201024/06/201524/06/2020

UNIT 8GROUND

Fast foodrestaurant

135 covers

Caspian Food Services Limited (Company No. 1450855)

t/a Burger King

Caspian UK Holdings Limited (Guarantor) (Company No. 00182180)

1A1

25yrs from 24/06/2000

24/06/200524/06/201024/06/201524/06/2020

UNIT 9GROUND

Retail Madhouse (UK) Limited (Company No. 05234237) O3 15 months from24/03/2005

UNIT 10GROUND

Retail MVC Entertainment Ltd (Company No. 02663149) N/A 15 years & 3 months from Agreement for Lease

24/06/200524/06/2010

UNIT 11GROUND

Bowling Centre

24 lanes

Tenpin Limited (Company No. 04789703)

t/a Megabowl5A1 25yrs from 24/06/2000

24/06/200524/06/201024/06/201524/06/2020

StarCity | 27

Floor Areasq ft sq m

Rent(Guarantee) £ pa

Rent£ / sq ft (£ / sq m)

Service Charge%

Next Review(Renewal)

Expiry Comments

121,749 11,310 1,861,847 15.29(142.62) 27.1705 27/06/2010 26/06/2025

1st & 2nd reviews minimum of 115.927% uplift.(2010: £2,158,383pa). Tenant option for further 15 years on notless than 13 months notice to expire no later than contractualterm.

2,702 251 57,500 21.28(229.08) 0.7078 27/01/2010 26/01/2020 Break options on the anniversary of years 3, 6, 9 and 12 on

six months notice

GF 5,740 GF 533 1st 2,140 1st 199

7,880 732(90,000) 11.42

(123.00) 2.1117 24/06/2005 23/06/2025 Vendor to provide 18 months rent guarantee. Tenant is inadministrative receivership.

3,994 371 92,731 23.22(250.00) 1.0721 24/06/2005 23/06/2025 Rent review outstanding.

4,019 373 96,000 23.89(257.37) 1.0702 24/06/05 23/09/2025

Payment plan in place at £42,500 pa up to 23/06/2006.Vendor to provide rental top up.Rent review outstanding.

3,768 350 93,675 24.86(267.64) 1.0181 24/06/2010 23/06/2025

15,369 1,428 240,000 15.62(168.07) 4.1661 24/06/2007 23/06/2027

Minimum uplift on each review of 115.93% of the immediatelypreceding yearly rent.2007: £278,232 pa.2012: £322,554 pa.2017: £373,937pa.2022: £433,505pa.

3,644 339 90,000 24.70(265.49) 0.9814 24/06/2005 23/09/2025

Payment Plan agreed at 50% passing rent.Arrangement to run to 23/06/2006.Vendor to provide rental top up.Rent review outstanding.

3,715 345 92,500 24.90(268.12) 1.0211 24/06/2005 23/06/2025 Rent review outstanding.

7,820 727 (91,000) 11.64(125.17) 2.1166 (24/06/2006) 24/06/2006

The rent is inclusive of service charge , insurance and rates.Lease outside 1954 Act. Vendor to provide 18 months rent guarantee.

10,112 939 (175,000) 17.30(186.37) 2.7374 24/06/2010 23/06/2015 Vendor will provide 18 months rent guarantee. Tenant in

administrative receivership.

38,162 3,545 340,965 8.93(96.18) 10.3373 24/06/2005 23/06/2025 AGA from Megabowl Limited. Landlord quoted £11.00 per sq ft

on outstanding rent review. £419,782 pa.

28 | StarCity

Core Income

Address Description Tenant D & B Rating Lease Term Rent Reviews

UNIT 12GROUND & MEZZ

Health & FitnessClub

Fit out rent

Holmes Place Holdings Limited (Company No. 02072529) 5A2 25yrs & 3 months from02/10/2000

02/10/200502/10/201002/10/201502/10/2020

UNIT 13GROUND

Restaurant

180 covers

Scottish & Newcastle Pub Enterprises (Property) Limited (Company No. 236608)

Scottish & Newcastle Plc (Guarantor) (Company No. SC016288)

5A1

5A125yrs from 24/06/2000

24/06/200524/06/201024/06/201524/06/2020

UNIT 14GROUND

Book retailerBorders (UK) Limited (Company No. 01580771)

t/a Books etcN4 15 yrs from 24/06/2000 24/06/2005

24/06/2010

UNIT 15GROUND

Restaurant

355 covers

Spirit Group Retail Limited (Company No. 3794854)

t/a Old Orleans

Spirit Group Intermediate Holdings Limited (Guarantor)

Scottish & Newcastle plc (AGA)

5A1 25yrs from 24/06/2000

24/06/200524/06/201024/06/201524/06/2020

UNITS 16, 22 & 23GROUND & 1ST FLOOR

BarScottish & Newcastle Pub Enterprises (Property) Limited

Scottish & Newcastle Plc (Guarantor)

5A1

5A125yrs from 24/06/2000

24/06/200524/06/201024/06/201524/06/2020

UNIT 17GROUND

Bar

180 covers

Scottish & Newcastle Pub Enterprises (Property) Limited

Scottish & Newcastle Plc (Guarantor)

5A1

5A125yrs from 24/06/2000

24/06/200524/06/201024/06/201524/06/2020

UNITS 18, 19 & 21GROUND & 1ST FLOOR

Leisure/Retail Vacant

UNIT 20 & 3RD FLOORMULTI STOREY CAR PARK

Outdoor SoccerPitches Goals Soccer Centres plc (Company No. 202545) 3A2 21 years from 24/06/2006 Annual

UNIT 241ST FLOOR

Retail Vacant

UNIT 251ST FLOOR

Restaurant

200 covers

La Tasca Restaurants Limited (Company No. 2820794)

t/a La Tasca2A1 25yrs & 3 months from

24/06/2000

24/06/201024/06/201524/06/2020

UNIT 261ST FLOOR

EntertainmentCentre HJM Leisure Limited (Company No. 04421410) t/a Funstation E2 20 yrs from 19/09/2005

19/09/201019/09/201519/09/2020

StarCity | 29




Service Charge%


Expiry Comments

GF 39,437 GF 3,664Mez 12,281 Mez 1,141

51,718 4,805

559,730.21

166,511

10.82(116.49)

13.8646 02/10/2010 01/01/2026

Rent reviews to OMV or formula plus fitting out.Rent = IR x (0.03+B/A)IR-Initial Rent; A-RPI at term start; B-RPI at review date.Assuming same growth rate going forward:2010: £646,264 pa.2015: £746,177 pa.2020: £861,535 pa.

Fitting out rent = FOR x RYR/PYEFOR-Fitting out rent before review;RYR- yearly rent at review date;PYE- yearly rent preceding review2010: £192,253 pa.2015: £221,976 pa.2020: £256,293 pa.

6,612 614 129,420 19.57(210.78) 1.7582 24/06/2005 23/06/2025

Tenant option for further 15 years on not less than 13 monthsnotice to expire no later than contractual term. Rent reviewoutstanding.

7,753 719 140,000 18.10(194.71) 2.0837 24/06/2005 23/06/2015 Rent review outstanding

7,027 653 140,000 19.92(214.39) 1.9093 24/06/2005 23/06/2025

Tenant option for further 15 years on not less than 13 monthsnotice to expire no later than contractual term. Rent review outstanding.

GF 3,853 GF 3581st 10,387 1st 965

14,240 1,323160,000 11.23

(120.94) 3.2102 24/06/2005 23/06/2025Tenant option for further 15 years on not less than 13 monthsnotice to expire no later than contractual term. Rent review outstanding.

5,461 507 105,000 19.23(207.10) 1.4631 24/06/2005 23/06/2025

Tenant option for further 15 years on not less than 13 monthsnotice to expire no later than contractual term. Rent reviewoutstanding. Unit sublet to Honbo plc.

GF 11,677 GF 1,0841st 9,590 1st 891

21,267 1,975(200,000) 9.40

(101.26) 5.7405 Vendor will provide 18 months rent guarantee.

GF 1,504 GF 1401st 6,481 1st 636

8,345 77667,500 8.09

(87.00) 2.2674 24/04/2007 23/06/2027

Rent free period expires 27/01/2007. Rent reviews are annual tolower of RPI or 3%. Initial rent payable will be increasedaccordingly. Capital contribution to tenant of £150,000.Agreement for Lease executed 27/01/2006. ERV based upon RPIestimate of 2.5% pa compound growth.

752 70 (10,000) 13.30(143.16) 0.1959 Vendor will provide 18 months rent guarantee.

3,612 336 59,795.15 16.55(177.96) 0.9817 24/06/2010 28/09/2025 Tenant option to break 23/06/2010 on not less than 13 months

prior written notice.

6,457 600 64,800 10.04(108.00) 1.7606 19/09/2010 18/09/2025

Tenant Option to break 19/09/2015. Rent deposit bond of£29,375.00.

30 | StarCity

Core IncomeAddress Description Tenant D & B Rating Lease Term Rent Reviews

UNIT 27GROUND & 1ST FLOOR

Leisure Vacant (under offer)

UNIT 28GROUND & 1ST FLOOR

CasinoStanley Casinos Limited

Stanley Leisure Plc (Guarantor)5A1 25yrs from 24/06/2002

24/06/200724/06/201224/06/201724/06/2022

KIOSK K1GROUND

Retail Claire’s Accessories UK Ltd (Company No. 3115188) 3A1 10 yrs from 24/06/2000 24/06/2005

KIOSK K2GROUND

Retail Vacant

KIOSK K3GROUND

Retail Stanley Casino’s Limited 5A1 3 years from 25/09/2003 None

KIOSK K41ST FLOOR

RestaurantMrs S R Vij

t/a Shobha’sN/A 10 years from completion

of landlord’s works 5th year

KIOSK K51ST FLOOR

Retail Kiosk Vacant

ATM 1GROUND

Cash Machine Alliance & Leicester Plc 5A1 10 years from 31/08/2000

ATM 2GROUND

Cash Machine Vacant

ATM 3GROUND

Cash MachineHSBC Bank Plc (Company No. 14259)

t/a HSBC5A1 10yrs from 31/08/2000 31/08/2005

ATM 4GROUND

Cash MachineAbbey National Plc (Company No. 02294747)

t/a Abbey National5A1 7yrs from 10/11/2004

CORE INCOME TOTALS

StarCity | 31




Service Charge%


Expiry Comments

GF 1,548 GF 1441st 10,115 1st 940

11,663 1,084(73,000) 6.26

(67.34) 2.7725

Vendor will provide 18 months rent guarantee. Under offer toStar Attractions Limited (t/a Lazerzone). 15 year lease withtenant break at year 10 subject to 6 months notice. 12 monthsrent free. 3 months rent deposit. No service charge payable until29/12/2006 and capped at £35,000 until 24/03/2007

GF 3,320 GF 3081st 25,968 1st 2,412

29,228 2,716260,000 8.89

(95.73) 6.7951 24/06/2007 23/06/2027

Minimum uplift on each review of 115.93% of the immediatelypreceding yearly rent.2007: £301,418 pa.2012: £349,433 pa.2017: £405,098 pa.2022 £469,630 pa.

GF 476 GF 441st 207 1st 19

683 6316,730 24.50

(265.56) 0.1872 24/06/2005 23/06/2010 Rent review outstanding.

386 36 (9,650) 25.00(265.27) 0.1092 Vendor to provide 18 month rent guarantee.

191 18 4,775 25.00 (265.27) 0.0541 (24/09/2006) 24/09/2006 Inclusive Rent.

684 64 9,000 13.16(140.63) 0.1902 2011 2016 Tenant break on 3rd anniversary subject to 6 months notice.

6 months rent free.

538 50 (7,150) 13.30(143.00) 0.1462 Vendor to provide 18 months rent guarantee.

11,500 31/08/2005 30/08/2010Service charge : fair proportion of the cost of cleaning, lightingand other services (if any) reasonably supplied by the Landlordin respect of the ATM room.

(12,000) Vendor to provide 18 months rent guarantee.

12,000 31/08/2005 30/08/2010

Tenant rolling break from 31/08/2005. Service Charge: fairproportion of cost of cleaning, lighting,and other services (if any)reasonably supplied by the landlord in respect of the ATM room.Rent review outstanding.

6,000 09/11/2011

Additional rent payable at a rate of £0.10 per transaction inexcess of 50,000 transactions. Service charge : fair proportionof the cost of cleaning, lighting and other services (if any)reasonably supplied by the Landlord in respect of the ATMroom. Lease is excluded from the 1954 Act.

399,549 37,119 £5,545,779.36 100.00%

32 | StarCity

Additional IncomeAddress Description Tenant D & B Rating Lease Term Rent Reviews

ATRIUM ATTRACTIONS& CAFÉ

Snow Slope/Play Area/ClimbingWall, Air Park, Atrium CoffeeShop

Eventive Funtime Limited N/A 6 months from 09/02/2006

EXTERNAL Trampoline Park King Alfred Leisure Limited N/A 8 months from 01/12/2005

ATRIUM 8 pay phones NWP Communications Payphones Limited N/A 5 years from 01/07/2000

ATRIUM Fun Sticker Machine Image Time (UK) Limited N/A 1 year from 10/02/2006

ATRIUM Simulator Select Simulation N/A 2 years from 01/10/2002

ATRIUM Beauty Bus VIP Contracts Limited N/A 6 months from 09/12/2005

ATRIUM Photo Booth Snap Digital Imaging Limited N/A 2 years from 01/05/2005

ATRIUM Portrait Studio Snap Digital Imaging Limited N/A 2 years from 01/05/2005

ATRIUM Sweet Vending Masterfoods N/A 3 years from 26/07/2004

EXTERNAL Lamppost Advertising Streetbroadcast POS Ltd N/A 15 years from 23/05/2005 23/05/2015

ATRIUM Cash Machine Moneybox Corporation Limited N/A 7 years from 31/12/2005

ATRIUM Children’s Rides Photo Me International Limited N/A From 14/03/2006

Trade Mark Fee Stanley Casinos Limited 5A1

Promotions, Events N/A

ADDITIONAL INCOME TOTAL

TOTAL GROSS RENTAL INCOME

StarCity | 33




Service Charge%


Expiry Comments

90,000 (31/08/2006) 31/08/2006

Projected income based on initial revenue. Licence for 6months terminable on or after 3 months subject to 14 daysnotice. There will be a 50/50 revenue split and the Landlord will pay acontribution of £20,000 towards operating costs for the period.Landlord also pays utility costs.

12,000 (30/06/2006) 30/06/2006 Rent paid monthly.

175 30/06/2005

Approximate Net Annual Income (Variable)Turnover rent receivable 30 days after each quarter Note : (31/3, 30/6, 30/9, 31/12). Based on a sliding percentage25/35%. After 5 years agreement can be terminated byLandlord (6 months notice) or NWP (3 months notice).

6,600 (10/06/2007) 10/06/2007 Rent calculated as 35% net turnover. Approximate Net AnnualIncome. Terminate on 7 days notice.

10,000 30/09/2003

Approximate Net Annual Income.Rent 50% of net turnover.Rent paid monthly.New agreement being negotiated.

19,200 (09/06/2006) 09/06/2006 New agreement being negotiated.

2,000 (30/04/2007) 30/04/2007Approximate Net Annual Income.Rent 40% of net turnover.Terminate 3 months in writing (either party).

2,000 (30/04/2007) 30/04/2007Approximate Net Annual Income.Rent 20% of net turnover.Terminate 28 days notice.

1,200 (25/07/2007) 25/07/2007 Approximate Net Annual Income.An additional 6% is payable above a fixed level.

3,200 23/05/2015 23/05/2020Approximate Net Annual Income.8 lamp posts at £400 per unit or 17.5% 'Net AdvertisingRevenue'.Installed in June 2005.

1,550 (30/12/2011) 30/12/2011 Approximate Net Annual Income.50 pence per transaction.

1,300 09/03/2004Approximate Net Annual Income.Rent 50% of net turnover.Rolling contract terminable on 1 month notice.

10,000 Fee for use of “Star City” name.Fee increase if roll out of brand.

30,000Circus, Funfair, etcApproximate net income based upon 2005 figures

189,225

399,549 37,119 £5,735,004.36 100.00%

34 | StarCity

StarCity | 35

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