PRIME LOCATION COMMERCIAL CONVERSION REGENERATION … · Fabrik Property Group Matt Harper-Penman...

PROJECTED CASHFLOW £32,163 PA

ROI: 62% (AFTER REFINANCE)

PRIME LOCATION

COMMERCIAL CONVERSION

FAST COMPLETION NEEDED

REGENERATION ZONE

Fabrik Property Group Matt Harper-Penman

www.fabrikpropertygroup.com M: 07813435267 T: 01253 291881

68 Topping Street, Blackpool FY1 3AQ E: [email protected]

50-52 Topping Street, Blackpool, FY1 1JD

MARKET VALUATION: £600,000 - £650,000 (AFTER REFURBISHMENT)

PURCHASE PRICE: £210,000

REFURBISHMENT: £240,000

PROJECT MANAGEMENT £28,800 (10% + VAT OF REFURBISHMENT)

STAMP DUTY £1,000

LEGALS £4,000 (SEPARATION OF TITLES)

FINANCE COSTS £40,580

TOTAL COST £524,380

DEPOSIT TO RESERVE: £10,000 (DEDUCTIBLE FROM PURCHASE)

S.A GROSS INCOME: £129,210

COMMERCIAL GROSS INCOME £16,000

TOTAL GROSS INCOME £145,210 Gross Yield: 27.69%

PROJECTED NET CASHFLOW £32,163 PA | £2,680 PCM ROI: 62%

NEEDED FOR BRIDGE PURCHASE c£230,000 (incl Refurb)

NEEDED FOR CASH PURCHASE c£525,000 (incl Refurb)

In the Blackpool Town Centre, this unit consists of, 1 x 1 Bedroom Apartment, 5 x 2 bed Apartment

and Two large commercial units.

Front Elavation Street Scene




Internals

Rear Elevation with Parking




Map View

Aerial Satelite View




Deal Background

The property has been secured by Fabrik from a developer that has recently got plans approved to

develop the site into 6 residential dwellings and 2 commercial units, 8 units in total.

The developer bought the property at Auction without planning which was a huge risk for them due

to the property residing in a conversation area which is notorious for planning to be refused. If

planning were to be refused on the property the developer would have been near on guaranteed to

have lost money. Fortunately, now the building has planning this presents a fantastic development

opportunity.

This risk taken allowed the developer to buy the property for relatively low price and now has

added real significant value to the site, boasting an end Gross Development Value of £600,000 -

£650,000. Leaving the now purchase price of £210,000 to represent true below market value.

This building now presents its self as a perfect example of a commercial conversion. The property

has planning permission for minimum 1 x 1-bedroom apartment, 5 x 2-bedroom apartments and 2

x commercial units.

The apartments will fit national room size standards and to the ground floor there is ample room to

create two nice spaced retail commercial units.

Located in the heart of the town center amongst the Blackpool Tower, Bars and Clubs

Aerial Satelite View




Primary Strategy: Serviced Accommodation

The block is in ideal location for Blackpool tourism located close to the promenade and short walk

from all the major attractions. The property is in the heart of the town amid the local council

regeneration plan valued at in excess of £100m, with 6 car parking spaces on site and an overspill

public car park directly behind the building which accommodates for all guests.

A major £300m investment has been announced not far from the site, which will generate more

demand for a serviced accommodation strategy.

1 x S.A Flats @ £90 per night £19,710 per annum (60% Occupancy)

5 X S.A Flats @ £100 per night £109,500 per annum (60% Occupancy)

Total SA Income £129,210

2 x commercial Units @ £134.61 per week £16,000 per annum

Total Gross Income £145,210 per annum (60% Occupancy)

Less:

70% Monthly S.A operational costs £90,447 per annum

10% Commercial Management costs £1,600 per annum

Mortgage £21,000 per annum

Circa Net Cashflow £32,163 per annum

Circa Net Cashflow £2,680 per month

Return On Investment 62%




Finance Breakdown (figures are a guide only)

Purchase £210,000 : Deposit £63,000 / Bridge £147,000 + £150,000 (Refurb) = 300k

Bridge Costs:

Arrangement fee 2% £2,940

Valuation £1,000

Bridge Legals £1,000

Interest 12 months @ 1% £35,640 (£297,000 x 1% x 12 months)

Total Cost £40,580




RICS Valuation




-The North Pier

-Main Nightclub Area

-50 – 52 Topping Street

-Blackpool North Train Station

-New Tram Tracks under construction

-New Budget Hotel under construction

There are many reasons why 50 – 52 Topping Street is in a fantastic place for Serviced

Accommodation. Above are the key factors as to why:

- The North Pier. The property is only a short 5-minute walk from the Blackpool Promenade,

specifically The North Pier.

- The Main Nightclub Area. Just before you hit The North Pier, you come across Blackpool’s best

area for nightlife, with its biggest, most popular bars and clubs.

- Running adjacent to the Topping Street property are new tram tracks undergoing construction.

The purpose of these additional tracks is to link the current tram to the Blackpool North train

station. This will also make travel from the property to the promenade and nightlife area even

easier.




Blackpool North Train Station. Just around the corner from the property is the train station for the

North of Blackpool. With this being such a convenient distance from the property, it’s another

reason for it to be more of an enticing stay, as there is easy access to Blackpool nationally by rail.

- There is also a new Holiday Inn Budget Hotel under construction about 100 meters from 50 –

52 Topping Street. With a huge development like this underway in the area, it’s only a good

sign that the area is in popular demand and is a great place to have accommodation for

holidaymakers.

This is a like-for-like comparison for the proposed opportunity. This is a Fabrik operated asset, which is located only a few doors

down. This building contains 3 x 1 bed apartments and 3 x 2 bed apartments. These apartments operate well above our minimum

conservative rate. Due to its location, we are seeing well over £100 per night on average across 12 months. Which we can

foresee being very achievable in the proposed project due to its similarity.




Serviced Accommodation Described

Serviced accommodation is a short term stay strategy. You may have noticed air bnb and

booking.com offering you the chance to stay in people’s houses or apartments, fully furnished as if it

were a home. This trend has been a big opportunity for property investors as you can achieve up to

5 x gross and sometimes more in income than a residential unit. The down side is the intense

management needed to operate the units. Fabrik Management company has the ability to offer this

as a service to landlords and its own internal companies. It charges 13.5% management fee, which

across the market is considered a fair fee for the work. Fabrik management has all of the needed

systems in place including-cleaners, a line manager to manage bookings, maintenance, daily call

center and an emergency out of hour numbers to call. We are currently live on over 40 portals. The

team go to regular training on the subject to stay ahead of the market.

Occupancy for Serviced Accommodation Described

The way we get to our net income before expenses figure is by multiplying the number of units by

£90 - £100 then multiplying again by 365 days and then multiplying by 60%. This gives us our 60%

occupancy figure. We feel, and other professionals feel 60% occupancy is a very safe number to

apply. Our accommodation is far better than that currently on the market, so we should be pushing

for 70 % - 80%, of course this would make the profit far higher, but we like to think worst case and

ensure we are happy with that first. Also £90 - £100 a night is considered safe.

Costs Described for Serviced Accommodation

From the 60% income we are expected to receive on the serviced accommodation units we would

then take 70% away. These costs include management, Booking.com fees (15%) and operating

costs such as maintenance, linen companies, cleaners, utilities (Gas, electric, council tax, water,

WIFI). Net profit is inclusive of VAT.

VAT

Please note there is VAT charged on the income after the SPV hits the £85,000 VAT threshold. This

has been included in your Net total cashflow.




Booking.com

Booking.com are the leading booking portal with 80%+ market share. They charge 15% for the use

of their platform. Convincing guests to book direct for a 5% discount is a way we combat this fee.

We encourage wherever possible to book direct and re-marklet the database with offers. Once

Fabrik has better brand exposure net incomes will definitely increase.

Our Calculations for Serviced Accomodation

We have kept a detailed record of our bookings, we are more than happy to show these on request.

Management and Build

This opportunity is offered on a complete turn key basis with the build being managed by our in

house contracts manager. The contracts manager oversees the main contractor by having a

contract between the client and contractor and keepingdrawsproviding regular liaison on the build

side, providing weekly photo and video updates. The project is handled right through to hand over to

our management company which will operate the letting strategy of your choice.

If you wish to use this project management service then we offer it at 10% +VAT of the

refurbishment value or £2,000 whichever is the higher




Fair Haven Lake – popular attraction for tourists and Locals

Lytham Festival is held every summer on Lytham green, attracting thousands of tourists..

Night prices will be up on these dates




Royal Lytham golf course is situated within close proximity to the property and there is

regularly professional golf championships played on this course which attracts golf fans from

around the world.

BAE Systems Warton is a corporate employer just outside of Lytham (5 min car drive) this is

a corporate outfit we will approach for longer term stays.




Blackpool Pleasure beach attracts thousands to the area every single year. Perfect for

Families

Sandcastle waterpark another great attraction for families




Regeneration and Investment Into Blackpool

Blackpool is a perfect location to invest in both residential and commercial property. It is an

unsaturated improving market filled with opportunity for investment and great return on that

investment. The town has a population of circa 150,000 and the demand for rental residential

property is very high.

There are hundreds of millions of pounds in investment presently being made in Blackpool with

regeneration schemes throughout the town, breathing new life into areas with the creation of new

leisure sites, hotels and restaurants. Large hotel chains such as Premier Inn, and Hilton are building

brand new state of the art hotels on the sea-fronted promenade. Hilton in particular have invested

£30 million in their new 130 bedroom hotel, which is set to transform the street scene on the south

shore coast line.

Another massive boost to the Blackpool economy is the fracking site that commenced operations in

the summer of 2017 and which has brought in excess of 15,000 jobs to Blackpool and

Lancashire. There has never been a better time than now to invest in Blackpool.

• Hampton by Hilton to open in Blackpool 2018 - Part of £31Million regeneration project

• Leisure Giant Whitbread proposed £10 Million Pound Premier Inn Hotel Approved

• Cuadrilla Natural gas from UK shale creating thousands of jobs

• Persimmon Homes - Coastal Dunes Development

• Kensingtons

• Redwood Point Blackpool landmark development

Resource Links

https://www.blackpool.gov.uk/News/2018/September/100m-regeneration-of-Blackpool-town-centre-confirmed.aspx

https://www.itv.com/news/granada/2018-12-07/blackpools-300m-masterplan-to-be-revealed/

https://www.businesscloud.co.uk/news/300m-blackpool-scheme-to-feature-vr-experience




£300m Chariots of the Gods Development in the centre of Blackpool

Blackpool Central State of the Art Development




The UK’s first Flying Theatre Attraction

9 year Development which will be implemented in 3 phases starting in 2020

PRIME LOCATION COMMERCIAL CONVERSION REGENERATION … · Fabrik Property Group Matt Harper-Penman...

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