In March 2016 TIME:Commercial Long Income purchased the freehold of the DoubleTree by Hilton hotel in Sheffield. The site is a purpose built, 131 bedroom hotel operating under the DoubleTree by Hilton brand. 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 £4 million and was issued with a 125 year Full Repairing and Insuring lease. The tenant used the commercial ground rent structure to repay its existing, expensive junior debt and to fund the development of an additional 36 bedroom block. This new development meant that the hotel could not
only satisfy additional demand but also meet the minimum room requirement to allow the hotel to benefit from additional Hilton based conference and banqueting bookings. The full market value of the hotel is approximately £11.2 million. The Fund purchased the freehold for £4 million but as such a long lease has been granted on a substantially reduced rent, a large proportion of the hotel value is within the leasehold interest. Should the tenant default on the terms set within the lease, the lease could be forfeited, and the full market value would revert to the Fund.
The hotel is well located for city and country visits, being just six miles from Sheffield city centre and five miles from the Peak District National Park, a designated Area of Outstanding Natural Beauty (AONB). A city in its own right, Sheffield is a metropolitan borough in South Yorkshire with a population of just under 552,000. The hotel is easily accessible from the
M1, and approximately four miles from two mainline stations. Local airports include Manchester International Airport and East Midlands (Derby) Airport.