Leisure Investment Market Review 2009 James Welch 9 th February 2009

Highlights in the 2009 calendar Barak Obama inaugurated Banking system of Iceland collapsed Britain officially entered recession Interest rates cut to 0.5% Unemployment hit 2.5m MP’s expenses exposed to public scrutiny Budget announces 50% income tax Google Street view launches Michael Jackson dies Katie Price leaves Peter Andre Sun switched its support to Conservatives Subo

A year of two halves Aftermath of Lehman collapse Lack of activity Fear of further corporate collapse Expectation of further price falls Retail Fund redemptions Rental values falling Lack of buyers Green shoots Corporate resilience Retail fund capital inflows Market had reached the bottom Lack of sellers Banks holding on Frenetic bidding Back to 2006

Prime Leisure Yields

Fiveways Birmingham Originally marketed April ‘08 Quoted £41.92m, 7.0% Rumoured to be under offer at start of ’09 Withdrawn mid year following offers at around £25m, 11% Photo of Fiveways site

Tenpin Coventry Owned by Aviva Originally marketed Aug ’08 Quoted £7m, 7.55% Under offer briefly end ’08 at 8.5% Under offer £5.85m, 9.0% Oct 09 Withdrawn as pressure to spend not sell Photo of Tenpin site in Coventry

Valley Leisure Park Croydon Originally marketed Oct ’08 Quoted £24.07m, 7.5% Under offer briefly end ’08 at 8.5% to Aberdeen Continued marketing ‘09 with interest at c.£20m, 9% Withdrawn as no pressure to sell Photo of Valley Leisure Park, Croydon

Rotunda Kingston Originally marketed June ’08 Quoted £48.25m, 6.5% Terms agreed Jan ‘09 Deal completed Dec ‘09 £42m, 7.46% Syndicated purchaser Photo of Rotunda Kingston

Grants Croydon Date: Oct ‘09 Vendor: X-Leisure Guide Price: £30m+ Initial Yield:8.0% Status: Under offer Dec ‘09 - ?7.75% Property Company purchaser Photo of Grants Croydon

Stevenage Leisure Park Date: July ‘09 Owner: Aviva Scheme: Prime edge of centre. Cinema, gym, bowl, nightclub, vacant FEC, bar, 9 restaurants Off market approaches at 9.0% on core income Photo of Stevenage Leisure Park

Festival Leisure Park Basildon Date: July ‘09 Owner: Aviva Scheme: Prime out of town. Strong trading cinema, bowl, nightclub, bars, 9 restaurants. Off market approaches at 9.0% on core income Photo of Festival Leisure Park Basildon

Other deals? National Amusements Quay Glasgow MEN Arena O2 Finchley Road Premier Travel Inn Portfolio

Green Shoots? More £ in our pockets Leisure displays defensive characteristics Spending on leisure has been more resilient in 2 of the last 3 recessions Forecast spending on leisure services to hold up Leisure operators appear to be weathering the storm Tendency for market to over correct Vendors being more realistic in their aspirations (or need to sell) One or two deals finding a level

Factors affecting the market Lower levels of gearing Initial Yield lead Large proportion of leisure in few hands Good performances from quality operators Long leases Less of an issue with over renting Low vacancy levels Attractive yield Prime v Secondary

Leisure Investment Market Review 2009 James Welch 9 th February 2009