In March 2016 TIME:Commercial Long Income completed the purchase of this freehold property comprising a purpose built 99 bedroom hotel owned and operated by Dolphin Hotel Property Limited.
If the tenant defaults on the lease, the leasehold interest would be forfeited and the market value of the freehold should be substantially higher than the value that the Fund paid for it.
In exchange for an ongoing ground rent, the tenant sold the freehold for £2.4 million and was issued with a 175 year in a Full Repairing and Insuring lease. The rent is reviewed annually linked to RPI (1% floor and 5% cap). The full market value of the hotel is approximately £7.1 million.
Southampton is the largest city in the county of Hampshire. The city is located at the northern-most point of the Southampton Water estuary, formed by the rivers Test, Itchen and Hamble, and protected by Isle of Wight acting as a natural breakwater.
The Mercure Southampton Centre Dolphin Hotel is situated in a strong location in the city centre, which is located at the south-side of the city near the coast. The city centre area has developed steadily into the primary commercial area for Southampton, forming an area now known as West Quay, with the WestQuay shopping centre being a major visitor attraction in Southampton, with over 150 shops, located 500 metres from the Mercure hotel.