Leisure Magazine

We are now over half way through 2013 and at the time of the year when the majority of the new 2013 property stock is on the market. Looking through the various agents that have leisure properties on the market, stock levels are high although the majority of properties appear to be those that are not particularly profitable, tired, overpriced, risky or require significant capital investment. The strength of demand is for the profitable leisure businesses.

The combination of a continued lack of growth in the economy, inflation and cost pressures still create major challenges to operators of leisure properties and this in turn is affecting capital values. Compounded with these challenges is the continued difficulty in obtaining finance and the banks not being willing to lend on anything they deem as high risk. Lack of available finance is driving down demand, and also effects a buyer’s decision making when considering properties that require capital investment either on improvements or repairs.

Demand for holidays in the UK appears to be at its peak, and this has primarily affected the hotel, caravan parks, holiday homes and accommodation businesses. The level of holiday demand also has an indirect effect on other leisure properties that offer activities and recreation as they also try to attract holiday makers as well as day trippers. Occupancy appears to be maintaining its strength in most accommodation businesses although at its expense the majority of operators do not appear to be increasing tariffs. This means that in the majority of businesses turnover is not growing whilst costs have increased and continue to increase primarily due to inflation.

The capital value of leisure property is linked to the maintainable trade and profitability of the business concerned. Whilst the multipliers applied to profits when assessing capital value has dropped due to reduced funding options and perceived increases in risk, the capital value should only fall back where profits in the business have reduced or remained stable. Where businesses have seen an increase in profits or otherwise look likely to improve profits, values have sustained and in some cases increased.

In the current market there is an increasing importance when assessing the value of leisure properties to focus on the specific key facts of the trading records and financial accounts. Underlying that is also the location of the business. Where properties are well located and can show certainty in terms of business performance, these could attract scarcity value as they are currently in under supply. I don’t believe there will be any dramatic shifts in the leisure property market over the coming years due to the continued pressure on costs and the limited opportunities to increase turn-over against the banks unwillingness to lend and the continued perceived risk in leisure properties.

Therefore, if an operator is considering selling their business there is no point in waiting to sell as it is unlikely that any significant increase in value will be attained going forward.

leisuremarket

a market update by Jonathan Wallis

“Demand for holidays in the UK appears to

be at its peak”

More people than ever are opting for a “staycation”, which is great news for the British leisure industry. With an increased number of participants looking for something different to do, the range of leisure activities in the countryside are increasing. New activities such as 4 wheel drive centres, mountain biking and high ropes courses are joining the more traditional fishing lakes, golf courses and farm parks.

In recent years the number of paintballing sites has massively increased across the UK and we are seeing increasing number of planning applications for new sites in the last 12 months. Paintballing is largely a phenomenon of the last twenty years, with many sites being franchised by large national operators.

The Government strongly supports rural leisure development, including paintballing sites; however, as rural leisure grows in economic importance it is acknowledged that planning the development of new sites needs to be sensitive to the environment in which they will be located. The successful management of the planning process requires an understanding of rural constraints and how to mitigate the specific impacts of new proposals. The British countryside is a unique and finite leisure resource; as such conflicts can arise when leisure activities are not complementary to the surrounding land use.

With increased numbers of applications the issues arising from the creation of new sites are becoming more understood by Councils, Planning Officers are becoming more proactive in dealing with the issues and objectors are becoming better informed. Planning applications, if not managed correctly, can become bogged down if the likely issues are not adequately addressed.

Wooded areas are commonly preferred locations for new paintballing sites, creating an interesting environment for the activity. Although the use may be partially mitigated (visually and acoustically) by trees, the use can nevertheless be contentious and concerns are often raised by neighbouring land uses and residential occupiers on a range of grounds.

A common objection is harm to the ecology of woodland areas. Planning applications can face stiff opposition from wildlife groups which claim paintball pellets could harm small animals and that the use can damage woodlands.

wargames

“Development of new sites needs to be sensitive to the

environment in which they will be located”

From our experience, well-monitored woodland management plans can be used to ensure that paintballing can take place alongside the wildlife habitat. Clearly identifying, from the outset, how any adverse impacts are going to be mitigated will ensure a planning application will not be refused on ecological grounds.

There may also be paraphernalia and rudimentary structures associated with the use which may be visually intrusive, and the ancillary activity (access and parking for such areas) may impact on the landscape. Detailed plans of the proposed structures will ensure that the Local Planning Authority can fully assess the application. This can result in having to submit elevation plans of timber tanks, helicopters, castles and other unusual structures!

Another concern often raised is noise disturbance. Noise associated with paintballing activities include paintball marker noise, occasional paint grenades and noise from attendees. Carefully siting paintballing game zones can

the planning & paintball challenge by Joe Ridgeon

ensure that objection is minimised. Again, submitting the correct information on expected noise levels and mitigation can ensure an application is successful.

A recent project that we have been involved in proposed a paintballing site in the Durham Green Belt. Any development within a Green Belt is notoriously difficult due to the high level of constraint set out in Government policy and the publics’ anti-development view. However, development associated with paintballing can be appropriate in the Green Belt where it is providing facilities for outdoor recreation, as long as it preserves openness.

This means that any proposed structures are designed and sited so as to ensure that visual intrusion is kept to a minimum and can be justified. The location in the Green Belt, in close proximity to the A1 and accessible to both Newcastle and Durham City Centres, means that the operator is able to tap in to the “stag-do” market on which paintballing thrives.

The suitability of a site for paintballing is based on a range of market driven factors, including proximity to urban areas, accessibility, and suitability of the site concerned. Often such sites are subject to a greater level of constraint, such as Green Belt, distance to residential property, access and highway safety issues. It will be beneficial in such cases to ensure that applications for planning permission are adequately supported by information to address any issues identified at the outset, and seeking the right advice to ensure that the planning process is as smooth and timely as possible.

meet the teamfind out more about our specialist leisure team

Jonathan Wallis - MRICS FAAV, Partner and Head of Leisure

Jonathan is Head of Leisure at George F White and specialises in valuation, sales and purchase as well as strategic advice. Recent cases Jonathan has been involved in include the sale of a large holiday park in the north east, advice to a tenant in respect of a commercial lease of a caravan park, the valuation of a golf course and the valuation of a leisure park for secured lending which included two touring caravan sites, a static caravan site, chalet park and a country shopping outlet.

t: 01388 529577, m: 07590 445301e: [email protected]

Maria Ferguson - MRTPI, Head of Planning & Development

Maria is a Chartered Town Planner with a wide range of experience in both the rural and urban sectors. Recent experience includes successfully obtaining planning permission for a range of developments on shooting estates including a shooting lodge and a series of tracks across grouse moors subject to an SSSI. Maria has also assisted hotel owners with extensions and various developments as well as restauranteurs and publicans with a range of planning issues.


Joe Ridgeon - RTPI, Planning Consultant

Joe is based in the Wolsingham office. Recent cases Joe has been involved in include securing planning permission for a mixed use leisure site in the North Pennines Area of Outstanding Natural Beauty and a number of equestrian developments. Joe has also secured various planning permissions for caravan sites and extensions to existing sites, as well as varying restrictive planning conditions attached to sites. He also provides expert planning advice for the valuation of leisure sites across the north east.


Charlotte Allen - BSc (Hons), Rural Practice Surveyor APC

Charlotte is an APC surveyor working in both the rural and leisure areas. Charlotte has been involved in the valuation and sale of a broad range of leisure properties. Recent experience has included the valuation of a caravan park for bank security and a valuation of a golf course for re-financing. Charlotte has sold equestrian properties across County Durham by private treaty and both chalet accommodation and fishing properties by auction.


for sale...a selection of the type of leisure properties we have recently placed on the market

Watergate Fishing Lake, Seaton, Co Durham

Attractive Fishing Lake32 Pegs • Excellent stocking • Accessible location • Attractive setting

Guide Price £50,000 Wolsinghamoffice-01388527966

Daleview Caravan Park, Middleton-in-Teesdale, Barnard Castle

Established park in excellent Teesdale location 3Bedroomhouse(EPCRatingG)•64staticcaravanpitchesand23touringpitches•Licensedpublichouseandfunctionpremises(EPCRatingD)•Parkamenities•Establishedtradingrecordswithpotentialtobefurtherimproved•Purchasepriceincludestheassignmentofthelease,freeholdoverpartofthesiteandthegoodwillandinterestofthe business

Guide Price £325,000 BarnardCastleoffice-01833690390

There has been a fanfare in the press about recent planning changes, the Government very proud of its plans and general commitment to freeing the country and the economy from the strangling red tape of the planning system they say has been created by politicians gone by.

The average publican may be unaware of the implications of the changes, still reeling from the effects of the smoking ban and grappling with other more pressing operational issues. But a number of changes will have an impact both on the value and the future disposability of pubic houses and other licensed premises.

The Localism Act, 2011, introduced ‘assets of community value’. In a response to what it described as a reaction against Governments ‘hoarding power’, The Localism Act gives communities the ‘right to bid’. Essentially, every community (village, town or neighbourhood) contains amenities which play an important role in local life, the loss of which would have a great impact upon the vitality of that community. The Act requires each Local Authority to maintain a list of assets of community value, and places a restriction on the owners of that asset, which may be a pub, shop, library or other community facility, when it comes to the sale or disposal of it. The intention is to give communities the opportunity to bid for it and ensure its retention. The obvious application of the new law is the village pub.

Recent years have seen an increase in groups of local residents / communities buying public houses and running them in order to retain them for the future of their neighbourhoods. Whilst this will no doubt in certain circumstances bring about a range of disputes common with multiple ownership, moreso when they lie within areas where it is felt that the asset ‘belongs’ to the communities in which they are located, by and large it can be a successful way to keep a village pub going.

The ‘right to buy’ is intended to give power to local communities wishing to keep their pubs open. However, there have been a significant number of nominations from the public to protect community assets, and unsurprisingly perhaps a growing number may be seen to have the sole intention of preventing or delaying unwanted development proposals. The majority of applications so far cover pubs and local shops, and of course listing a property as an asset of community value does not prevent the grant of planning permission, but a listing is clearly a material planning consideration which will be taken into account at the planning application stage. How much weight that will be given in each circumstance remains to be seen, but uncertainty and

potential delay will inevitably impact on the value of a property and so owners would be well advised to object strongly to an application to list their property as an asset of community value.

On the other hand, recent changes in Permitted Development rights relating to commercial use classes – creating ‘flexible uses’ will not prevent the loss of public houses to other uses. A commercial building (within use classes A1, A2, A3, A4, A5, B1, D1 and D2), meeting certain criteria, may now change to either a shop, office or restaurant / café (use classes A1, A2, A3 or B1). Due to the way in which the Use Classes Order works, the changes permitted do not work both ways. A pub changing to a shop or restaurant cannot then change back to a pub without the benefit of full planning permission.

Many owners of rural pubs will be aware that it can be very difficult to obtain planning permission for alternative uses, including residential. Planning policies have for some time existed to protect the few remaining services and facilities within our smaller village communities. The National Planning Policy Framework, published in March last year replacing a substantial volume of planning policy and guidance, continues this theme, urging Local Planning Authorities to “promote the retention and development of local services and community facilities in villages, such as local shops, meeting places, sports venues, cultural buildings, public houses and places of worship”. A range of information will be needed in some cases to support any loss of a community facility such as a public house, and with a community right to bid system in place communities are far more empowered in the current system than ever before should they wish to prevent the loss of ‘their’ local pub! It has never been so important to obtain the right advice prior to disposal or re-use, both in terms of legal / agency advice and planning.

public housesor public assets?

by Maria Ferguson

“Every community contains amenities

which play an important role

in local life”

Sporting properties come in all shapes and sizes, from a few metres of fishing rights on a river to 1,000 acre moors for shooting and stalking; to equestrian properties for both private and business use. As ever no two properties are the same and the variety of property can make for some exciting opportunities.

Buyers looking for small equestrian properties or land which they can utilise for horses tend to have three main concerns or questions:

• Availability of services, especially water • Quality of the ground, can they graze the whole area, does

it flood? • Can they get planning permission for stables?

Demand for small parcels of land which is suitable for horses is still high, especially with the cost of livery rising. However, purchasers in this market are careful not to over stretch their budgets and sellers therefore need to price land accordingly.

Large equestrian properties for sale or let are rare in the North East of England, therefore when they become available they are popular, gaining plenty of interest from potential purchasers. That interest could be for either private or business use, or a combination of the two.

Fishing is a popular sport and offers many opportunities for sellers and purchasers alike. From several metres on a quiet river to large fishing lakes there is an opportunity for everyone who wants to have a piece of their sporting dream.

Fishing rights on good rivers such as the River Tweed rarely come available on the open market and therefore achieve a premium. However fishing rights on lesser known rivers, which still offer superb fishing but without the hype, do come onto the market and can achieve strong sale prices.

Shooting, be it pheasant or deer stalking is available all over the country and the market for properties offering established shoots, or the potential for establishing good shoots are highly sort after, not just from local, regional or national buyers but also from international buyers.

You don’t necessarily require land to make available sporting opportunities, historically sporting rights were often excluded from the land when it was sold or let, as people either wanted to retain the rights or prevent others from using these rights, and therefore over time the land and sporting rights have become separated. Although it is not as common to reserve

sportingproperties

these from a sale now, it is always a possible option. If you own the sporting rights over an area of land, providing all the necessary rights associated with the sport you wish to participate in have also been reserved, for example parking and access either by foot or with vehicles, then these sporting rights could be sold or let.

Conversely if you own the land, but not the sporting rights, you could make enquires with the party who owns the sporting rights and if they are willing you may be able to negotiate a sale or let of these rights.

If you have a sporting property of any type, chances are there will be somebody in the market who wants to buy that sporting opportunity.

by Charlotte Allen

our servicewhat our team can do for you

If you are looking to buy, sell or let leisure properties we have highly skilled leisure experts across our company who can assist with your individual requirements.

Our professional team can also provide experience and market intelligence to maximise and promote your portfolios.

Our range of services to the leisure sector includes:

• Sales and acquisitions• Landlord and tenant matters to include lease renewals,

rent reviews and disputes• Professional valuations for portfolio planning, tax,

pension purposes, secured lending• Planning advice, assistance and consultancy • Feasibility studies and business planning

We can provide services to the following:

• Caravan parks• Golf courses• Licensed premises• Trade related properties• Rural sporting properties including fishing & sailing lakes

and shooting properties• Holiday homes

Recent Work

Below is a selection of recent work we have been instructed on relating to leisure properties, including:

• Valuation of a leisure park for secured lending which included two touring caravan pitches, static caravan pitches, planning consents for holiday chalets and a country shopping outlet

• Professional valuation of a caravan site for portfolio planning• Advice in the potential sale of a large holiday park in the

north east• Advice to a tenant in respect of a commercial lease of

a caravan park with a view to potentially purchasing the freehold interest of the property

• Acting in securing a number of planning consents for caravan parks, extensions to existing caravan parks, holiday chalets as well as alterations of conditions to existing planning consents

• Acting in securing planning consent for an access road across a major and environmentally sensitive grouse moor.

Leisure Magazine

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