COUNTY DURHAM,

NORTH EAST ENGLAND

HOTE L 52S T A N L E Y

Surrenden Invest is a London centric property investment consultancy providing private investors with opportunities in high demand growth areas.

Before we bring a development to the market, our project management team

under take extensive due diligence to ensure every project meets with the four

major commitments we make to our investors. We offer a holistic approach to

investment services allowing our clients to entrust the day-to-day running of

their por tfolio to our management team or alternatively take control of their

por tfolio whilst benefiting from our advice and experience.

SURRENDEN INVEST THE HOME OF YOUR PORTFOLIO

Surrenden Invest unlock exclusive off market stock in high demand growth areas.

OUR COMMITMENT TO YOU

ASSET BACKED INVESTMENT Feel confident in your investments with clear registered legal title facilitated through a UK solicitor.

OFF MARKET DEVELOPMENTS Surrenden Invest specialises in off market proper ty and works with some of the largest developers and exclusive proper ty por tfolios in the UK.

STRONG SUSTAINABLE DEMAND We under take extensive market research to ensure our projects are located in high demand growth areas.

HANDS-FREE MANAGEMENT End-to-end investment management services allowing you to leave the day-to-day running of your por tfolio to our team.

H OT E L RO O M I N V E S T M E N T

There are numerous appeals of investing in an alternative property asset class such as hotel rooms. Not least the counter cyclical nature of alternative investments such as these which attract savvy investors often priced out of mainstream sectors and looking for higher yields than more traditional property asset classes such as residential property, offices and retail. Of the respondents considering investing, developing or lending to alternatives in 2017, surveyed for the JLL UK hotels forecast 2018, 51% favour hotels.

Other appeals of hotel investment include the hands off and hassle-free aspects of room ownership. Unlike owning your own hotel or B&B and all the hard work associated with running such an operation, hotel room investors can sit back and relax whilst the management team market, manage and maintain your room.

The low entry price of many hotel rooms, especially when compared to residential buy-to-let, also make these investments attractive along with the lower risk profile, immediate income from date of purchase and guaranteed exit through the Buy Back schemes in place.

HOTEL INVESTMENT A BOOMING MARKETInvesting in a hotel room is not a new concept. For decades, institutional investors have been purchasing hotel rooms around the wor ld, leasing them back to paying guests and enjoying the lucrative income. What is new however is that now access to hotel rooms is a possibility for individual investors and the market is booming.

Looking ahead to 2018 and the outlook is equally bright. CBRE’s 2018 Market Outlook expects the UK property sector to continue to perform solidly with the so-called “beds sector” which includes hotels, weathering any uncertainty well. JLL’s UK Property Predictions 2018 reports that almost a third (32%) of hotel investors expect millennials to drive business for the hotel and leisure sector over the next five years with investors now much more comfortable with hotels as an asset class, no longer viewing them as ‘alternative’.

“While some proper ty sectors will see extremely patchy growth performance, the rise and rise of Industrials & Logistics looks likely to continue, and the ‘beds sectors’ like hotels, built-to-rent and healthcare are also set to grow strongly.”

Miles Gibson, Head of UK Research at CBRE

This sentiment is echoed by Colliers International who view hotels as an “attractive and popular” investment oppor tunity despite Brexit uncer tainty and in fact, a weaker sterling is expected to attract even more international buyers to UK hotels, especially those located in the provinces, over the next 12 months.

2 0 1 8 O U T L O O K F O R U K H OT E L I N V E S T M E N T

£4bn

£5.1bn

7.3% 38%

The UK hotel sector performed well in 2017 with a weakened sterling, growth in staycations and improved infrastructure development all contributing to investment levels exceeding those of 2016.

Both JLL and Savills repor ted increases in hotel transactions for 2017 with Savills forecasting that annual UK hotel investment volumes will reach £5.1bn by the end of the year, 25% up on what they believed to have been the 2016 total of £4bn. Interestingly Savills also repor ted that overseas investors accounted for 38% of hotel transaction volumes in the UK regions in 2017, up from a 7.3% share in 2016.

“Brexit concerns has done little, so far, to negatively affect the flow of hotel transactional activity throughout the UK. There continues to be considerable demand from both domestic and overseas buyers, as hotels continue to be an attractive and popular investment oppor tunity.”

Julian Troup, Head of UK hotels agency at Colliers International

2016

2016 2017

UK hotel investment volume Overseas investment volume

2017

According to a survey of attendees of the 2017 Deloitte European Hotel Investment Conference, hotel investors are broadly optimistic about 2018 growth prospects in the Regional UK hotel market, with the majority of respondents expecting RevPAR growth to be between 1-3%.

JLL have forecast year-on-year regional hotel occupancy growth of 0.3% in 2018, maintaining a high occupancy level at 76% and Average Daily Rate (ADR) growth is forecast to increase by 2%, driving a healthy RevPAR gain of 2.3% in 2018.

Source: PwC, STR, AM PM

OCCUPANCY ADR NEW SUPPLY GROWTHRevPAR

Regional hotel performance is closely linked to the strength of the UK and local economies. Hotels outside London tend to rely more on domestic demand, with conference, meetings and corporate demand a key driver. 2017 saw a weak pound fur ther boost a number of key tourism destination cities with many cities in H1 2017 seeing 4.4% RevPAR growth (JLL).

Provinces

London

Budget hotel expansion has helped boost occupancies

Above average new supply growth could dampen prospects if demand softens.

ADR recovery continues

Regional room supply 2017 (F)

London room supply 2017 (F)

Additional room supply 2018 (F)

London room supply 2018 (F)

Annual NET supply growth (2018)

Annual NET supply growth (2018)

rooms

rooms

rooms

roomsMore modest growth edges rates up further

20% ahead of past peaks in nominal terms but still closing

the gap in real terms

A RevPAR resurgence after a disappointing 2016

More budget hotels in the supply mix have helped London occupancies stay high too

+ 0.2%

76%+2.0%

492,000

152,000

+12,000

+7,000+2.2%

+2.3%+2.4%

+4.6%+2.4%

PROVINCES

LONDON

83%

Provinces£72

London£148

£55

£55

HOTEL

HOTEL

T H E R E G I O N A L U K H OT E L M A R K E T

+ 0.3%

T H E R E G I O N A L U K H OT E L M A R K E T

Provinces are almost back to 2007 in real terms

2007 2011 20152009 2013 2017F2008 2012 20162010 2014 2018F

Real RevPAR index

Base

Forecast125.0

120.0

115.0

110.0

105.0

100.0

95.0

90.0

85.0

80.0

75.0

Nominal RevPAR index

Source: PwC

PwC anticipate a fur ther 2.3% RevPAR growth for the UK regional sector in 2018 with an expected 12,000 new hotel rooms coming on stream during the year. PwC cites “strong trading fundamentals and consumer demand for modern and refurbished branded products in new and existing locations” as driving new development.

D R I V E R S F O R G ROW T H

Another key driver which made its presence known in 2017 and will continue to do so in 2018 is inbound tourism to the UK. Visit Britain’s forecast for 2017 is 39.9 million visits to the UK, an increase of 6.2% on 2016 with a 11.6% increase in spending accounting for £25.1 billion. The forecast for 2018 is even better at 41.7 million visits, an increase of 4.4% on 2017 levels and a total spend of £26.9 billion.

OVERSEAS VIS ITS TO UK CONTINUES TO GROW

2018

2016

2013

2017

2014

2015

2012

41.7m

37.6m

32.7m

39.9m

Forecast/millions

Visit/millions

34.4m

36.1m

31.1m

“Tourism is one of the UK’s most valuable export industries. It is also a fiercely competitive global industry and these results not only demonstrate Britain’s continued ability to compete internationally for visitors, they are testament to tourism’s importance as a driver of economic growth.”Patricia Yates, Director, VisitBritain

Hotel 52 Stanley is an exclusive, 23-room boutique hotel that is ideally located to serve visitors to both Durham and Newcastle, as well as the stunning Nor th Pennines Area of Outstanding Natural Beauty.

H OT E L RO O M I N V E S T M E N T

The superbly renovated facilities are complemented by a carefully thought out service, from speedy check-in to free WiFi and super comfor table beds.

A plush lounge area is available for all guests to use, while business travellers can take advantage of the on-site conference facilities, which can accommodate up to 16 delegates. The impressive breakfast and delicious lunchtime and evening meals are served in the renowned Pazzo Italian restaurant and bar, along with a selection of exquisite cocktails.

Hotel 52 Stanley’s personal service and stylish, homely facilities have resulted in a high repeat bookings rate and a plethora of positive reviews, marking the hotel out as the ideal affordable boutique venue for those looking to get the most from their visit to the Nor th East.

Hotel 52 Stanley brings something fresh to the Countr y Durham area. The hotel offers an affordable boutique experience that delivers stylish rooms at great prices. The 23 rooms include doubles, twins, triples and family suites, each of which features a fully equipped kitchen.

P RO J E C T D E TA I L S

H OT E L RO O M I N V E S T M E N T

Set along the 140-mile Sustrans Coast to Coast (C2C) Cycle Route, Stanley is a popular location for those looking to combine traditional English life with access to stunning rural vistas, thanks to its proximity to the Durham Dales.

With a lively ar ts scene, focused around the Lamplight Ar ts Centre, and a renowned summer play scheme that draws in young people from the surrounding area, Stanley is a family-friendly destination that offers a host of local attractions.

The nearby award-winning Beamish Museum and Tanfield Railway are both popular with visitors to Stanley. A ‘living museum,’ Beamish is an open air experience that tells the story of life in the North East during the 1820s, 1900s and 1940s. Hotel 52 Stanley is just a shor t drive from it, while the North Pennines Area of Outstanding Natural Beauty is also only minutes away.

S TA N L E Y O N L O C AT I O N

Stanley enjoys a prime location in Nor th East England, being perfectly sited for those visiting both Durham and Newcastle. The friendly, former mining community, with its thriving weekly market, offers an excellent base for exploring the Nor th East, whether for business or leisure purposes.

H OT E L RO O M I N V E S T M E N T

The majestic grace of Durham Cathedral, and the solid strength of the adjacent Durham Castle, make up a UNESCO World Heritage Site that delights visitors of all ages. The city centre is also a joy to visit and the local area features several outstanding restaurants (James Close’s two Michelin-starred Raby Hunt notably featured in the last series of Masterchef – The Professionals).

The twin cities of Newcastle and Gateshead, spanning the River Tyne, are also just 30 minutes from Stanley, and offer some of the liveliest and best shopping, eating and drinking to be found anywhere in the Nor th East. The rejuvenated quayside area is a must for visitors, as is the stunning Gateshead Millennium Bridge, while the whole area offers culture aplenty, from museums and ar t galleries to live music venues and theatres.

Newcastle has also carved out a role for itself as the innovation capital of the Nor th East, with the city’s strong entrepreneurial and technical credentials attracting a steady stream of business visitors.

With excellent transpor t links to Newcastle and Durham, Stanley makes a great base for accessing the surrounding area. County Durham as a whole enjoys more than 19.25 million visitors per year, with the historic city of Durham being one of the main local attractions.

T H E S U R RO U N D I N G A R E A

In the town centre, work is currently underway on two multi-million pound developments, bolstering Stanley’s retail offering and serving the town’s growing population. The regeneration schemes follow the upgrading of more than 20 town centre business premises, along with work to provide new paving, lighting, street furniture and planting areas, as par t of the town centre’s beautification.

Regeneration works in Stanley have also included infrastructure improvements. The bus station has been upgraded, along with several key roads, and car parking has been improved.

Stanley has also seen the £1.5 million regeneration of Hotel 52 Stanley, which is now actively serving the town’s leisure and business visitors.

O N R E G E N E R AT I O N

Over the past few years, Stanley has benefitted from a significant amount of regeneration funding. £33 million wor th of investment was committed to regeneration in 2014, following a large-scale fire the year before. Since then, a number of new housing developments have sprung up, with the November 2016 Stanley Masterplan update repor ting the deliver y of 150 new homes and plans for 770 more.

H OT E L RO O M I N V E S T M E N T “I warmly welcome these impor tant developments which will contribute to the regeneration of Stanley.”Nor th Durham MP Kevan Jones

D E V E L O P E R PA RT N E RThe High Street Group is a leading financial and proper ty group, one of the Nor th East’s most recognised and respected brands. The Group operate multiple companies in proper ty development and construction, hospitality and leisure, offering exper tise and oppor tunities across multiple sectors.

Since its inception 10 years ago, The High Street Group has expanded rapidly with unparalleled growth, now employing more than 100 people in the Head Office in Newcastle upon Tyne and across development sites in the UK.

The High Street Group currently has developments under management in excess of £300,000,000. In March 2017, it completed the sale of Silbury Boulevard, Milton Keynes to Grainger Trust plc for £31,000,000.

In 2017 the Group developed a hotel business strategy to identify and build a chain of budget-boutique hotels in the Nor th of England that will compete in price with budget hotel groups. Over the next 5 years the company will deliver 15-20 hotels. The hotel sites are strategically placed to capture both the commerce and leisure market, ensuring high occupancy levels.

Company Name: High Street GRP Limited

Company Number: 07831810

Registered Address: 2nd Floor Cuthber t House All Saints Business Centre Newcastle upon Tyne Tyne and Wear NE1 2ET

Director: Gary Forrest

Security Trustee: Castle Trust Group 932 Europor t, Gibraltar

Auditors: Stokoe Rodger Char tered Accountants 15 Bankside, The Watermark Gateshead, Tyne & Wear NE11 9SY

Lawyers: Mincoffs Solicitors LLP 5 Osborne Terrace Newcastle upon Tyne NE2 1SQ

DIRECTORS & ADVISORS

F I N A N C I A L B R E A K D OW NRenovated at a cost of £1.5 million in 2017, Hotel 52 Stanley opened its doors once more on 1 December. The average hotel occupancy rate in the Nor th East of England is 75%. In the first quar ter of 2018, Hotel 52 Stanley reached an occupancy rate of 86%.

Investors will receive an immediate guaranteed yield from day one for up to ten years, with a guaranteed Buy Back at 125%, backed up and securitised by the High Street Group.

UK hotel investments remain an attractive option for both domestic investors and those from overseas. The latest Savills UK Commercial Market in Minutes repor t showed stable prime yields of 4.5% for regional hotels for both February and March 2018.

Years 1–5 £5,750 NET per annum

Years 6–10 £6,325 NET per annum

Buy back at year 10 £71,875

Total NET income for period £74,750 NET

10 YEAR F INANCIAL S IMULATION

FINANCIAL BREAKDOWN

Years 1-5 10% NET

Years 6-10 11% NET

Buyback 125% NET

Total ROI 130% NET

10 YEAR YIELD STRUCTURE

On reservation: £5,000

Exchange/completion £52,500

Total capital outlay £57,500

F INANCIAL BREAKDOWN

PROJECTED CASH RETURN OVER 10 YEARS £74,750

PROJECTED ROI % OVER 10 YEARS 130%

ANNUALISED ROI 13.00%

Financial simulation is based on a 10 year scenario.

We make no representation or warranty of any kind with regard to the information contained in this brochure and none of the information shall be treated as financial advice. The information is not an invitation to invest and you must rely entirely on your own investigations and due diligence before making the decision to invest. Any opinions expressed in this document are not statement of facts.

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