UK Property Market Review 2009

1. UK Property Market Review 2009 Leisure Rob Howarth - JLL James Welch – Cortex Partners 9th February 2010

2. Agenda • Occupier Market 2009 • Investment Market 2009 • Discussion • Drinks & Crisps

3. Occupier Market - Health & Fitness • The rise of the super budget gym • Super flexible, technology led, simple, low price • Expansion race • Local Authority offers / competition • JJB Health Clubs sold to Dave Whelan • Mid market pressure • Esporta outlook Photo of two women enjoying a free weights keep-fit session

4. Occupier Market - Health & Fitness • The Gym • Pure Gym • NuYuu Fitness • Fitspace • Gym4All • Fitness 4 Less • MiFit Photo of modern looking gym

5. Ten Pin Bowling 1960s style photo of a women about to play ten-pin bowls Photo of Woody Harrelson as bowler Roy Munson from the movie ‘Kingpin’ about to play ten-pin.

6. AMF Ten Pin Bowlplex Namco Bandai Hollywood Bowl (M&B) Lakeside Superbowl American Amusements Bloomsbury All Star Lanes Strike Bowling Bars Ten Pin Bowling Photo of Woody Harrelson as bowler Roy Munson from the movie ‘Kingpin’ about to play ten-pin.

7. Ten Pin Bowling 1960s style photo of a women about to play ten-pin bowls • Trading conditions challenging, smoking ban, economy etc • Limited openings – Namco MetroCentre, AMF Eastleigh • Market continues to be flat in terms of rental growth • Weather has impacted performance, limited cash to invest • Remains a strong family activity and an important part of any leisure pitch or scheme

8. Cinema Image of two blue characters from the movie Avatar

9. Occupier Market - Cinema • Record admissions in 2009 • Slum Dog, Up, Twilight, Potter, Avatar, Ice Age • Gross Box Office Sales increase 11% on 08 • Screen Advertising Down • Popcorn Up • Digital, 3D and IMAX making an impact

10. Occupier Market - Cinema • National Amusements deal or no deal • HMV Curzon Wimbledon • Hoyts departs UK…finally • Vue step into Westfield deal • O2 Greenwich cinema being marketed • New overseas players ?

11. Photo of high street entrance to an HMV Curzon cinema Photo of lobby area in an HMV Curzon cinema Photo of auditorium in an HMV Curzon cinema

12. Odeon ( 823 screens 22.5%) Cine UK ( 791 screens 21%) VUE ( 634 screens 17%) Showcase ( 274 screens 7.5%) Empire (145 screens 4%) City Screen ( 58 screens 1.5%) REEL ( 47 screens <1.5%) Apollo ( 79 screens 2%) Everyman ( 9 screens <0.5%) Independents ( 700+ screens 22.5%) Cinema - Operators

13. Cinema • Operators still want to expand, availability of funds and development slowdown issue • Challenge of making deals work • Rental growth remains static • Supermarket / planning gain opportunities • Still the footfall driver for any location

14. Image from Odeon Metro Centre marketing montage photo

15. Cinemas – 2009 Openings

16. Cinemas – 2010 Openings

17. Cinema • Cinema remains the leisure anchor • Landlords / Developers want leading edge design, offer, events to differentiate • Vibrancy, excitement, an experience to drag people out of home • Sporting telecasts, Opera, 3D digital keeping offer relevant • BIG blockbusters still driver • Healthy operationally, challenge property side

18. Restaurants • Casual Dining operators weathered the economic storm • Upper end in London strong • Fast Food operators flourished • Independents suffering Image of Café Rouge advert or poster showing an external shot of one of their café’s

19. Restaurants • There were failures however • Active operators; Nandos, Gondola, Tragus, TRG, Fast Food, Buffet Ops • Schemes offered incentives 2-3 years • Development slowdown impacted • Requirements for 2010 remain strong Image of self service counter of an unidentified restaurant

20. Licensed Trade • The number of pubs closing its doors has fallen from 52 a week in the first half of 2009 to 39 in the latter half of the year The British Beer & Pub Association. - 2,365 pubs closed in 2009 • Total pubs today 52,500 compared to 58,600 in 2005 (10.4%) - Pub beer sales were down 5.2% in 2009– an improvement on the 9.3 per cent slump in 2008 and 6.5 per cent fall in 2007.Mixed trading results • Food led approach is profitable

21. Photo of boarded-up pub with lots of different agency signs up

22. Licensed Trade • Corporate activity – Punch freehold sell off • Requirements for High Street and Destination locations • Offering good quality and varied food offers, off-setting the falling beer sales • Operators need to be relevant, offer good value for money, or add value

23. Casinos • Trading conditions remain challenging for operators • London however performed well • Stabilised in the regions • Operators disposing of properties / amalgamating clubs • Fifty St James, Blue Chip Casinos, Isle of Capri

24. Circa 140 trading casinos in UK 16 new 2005 Act casino licences still not issued Only Newham have started their selection process Who will actively pursue the new licences? MK, Newham, Luton, Leeds, Southampton Genting Stanley Gala Grosvenor (Rank) London Clubs (Harrahs) A & S Leisure Aspinalls Independents Casino

25. Occupier Market - Bingo • Is the worst over for Bingo? • Smoking ban seriously affected the sector • Attendances down but spend per head up • Treasury to reduce bingo duty • Growing unemployment figures will impact • Virtually no activity from any operators

26. Leisure Investment Market Review of 2009 James Welch Cortex Partners