Maritime’s vision and foresight has transformed a retail parade with vacant office space above into a highly successful mixed-use development.
The parade of 10 shops in central Gosport, Hampshire, was purchased directly by Maritime in April 2015 for £2.44m as an off-market acquisition.
Tenants included a variety of local and national retailers and there were 5,000 sq ft of vacant offices above, plus a service yard to the rear.
The site was producing a 10 per cent return, but thanks to our years of experience in development and investment we were able to see further potential in the large service yard and vacant offices in a prime town centre location.
One option envisioned a residential scheme with 20 apartments constructed on stilts over the car park, with another 30 flats occupying the office space, and all of the shops retained underneath.
We also looked at alternative users and started initial conversations with hotel operators.
Due to our long-standing relationship with Travelodge, they bought into the concept of a 70-room hotel.
However after analysing the development appraisal, the figures did not support situating the hotel in the unused office space.
After comprehensive risk-reward analysis, we were able to surrender some of the leases of tenants that had weaker covenants, negotiating on premiums to break their leases in order to demolish the central portion of the parade and let the space to Travelodge.
This allowed us to regain the upper parts and expand the shop units of those tenants with stronger covenants.
Planning permission was granted for a 70-bedroom budget hotel scheme with a new A3 retail unit.
A pre-letting agreement with Travelodge allowed us to access forward funding for a value of £6.6m, which secured us a purchase price and binds the operator in for a 25-year period.
Maritime’s links with Travelodge mean that the hotel building was constructed according to their exact specifications. To ensure timely delivery we engaged approved construction firms who had worked on similar projects.
The development took place without affecting all of the site’s existing income stream, and the hotel has become one of the best-performing in the Travelodge chain.
Maritime Capital also retained the two end properties of the parade as separate assets. At 17 High Street, a development of 12 flats above the retail space is ongoing, while No.8 has received planning permission for 21 units.
This highly-successful outcome demonstrates Maritime’s ability to use priceless connections and problem solving to create value on a project.
