Escapade Silverstone Weekend

[coppice]

'Best motorsport view on the planet ' my arse.On a windswept plateau overlooking a massively overrated series of bends which only are worth watching with much faster cars than most of the ones which were at the BRDC Classic( which I also attended and watched mainly from the (far better) Jim Clark stand) .If you want an infinitely better view , try Hall Bends, Coppice and the Mountain at Cadwell - no avocado nor room service but you won't need to sell a kidney to get in . Or St Mary's at Goodwood , a little more upmarket but where you can watch such wonderful machinery sideways at big speeds

Edited by coppice on Wednesday 5th August 08:35

[bergclimber34]

You have to cater for everyone, and as we see there now, there are enough people prepared to pay stupid money to use it, that will have been researched before it was built, Tindall is not an idiot.

The trend for pricing is upwards for anything, F1, WEC, Motogp.

Fomo is a huge aspect as is people's reluctance to travel abroad at times,

Think of motorway services and you have some idea if how Pringle runs the place. Surprised he doesn't charge for the toilets.

[paulguitar]

coppice said:

'Best motorsport view on the planet ' my arse.On a windswept plateau overlooking a massively overrated series of bends which only are worth watching withmcuh faster cars than most of the ones were at the BRDC Classic , which I also attended .If you want an infiintely better view , try Hall Bends, Coppice and the Mountain at Cadwell - no avocado nor room service but you won't need to sell a kidney to get in . Or St Mary's at Goodwood , a little more upmarket but where you can watch such wonderful machinery sideways at big speeds

Avocado? I'm detecting a bit of a Luke-like attitude there!

To be fair, I can only compare the view to other places I have spectated from. But I've been to a lot of circuits and corners in the last 45 years, all over the world, and this is up there with anything I have seen.

I disagree that the Becketts complex is 'massively overrated'. It's spectacular viewing with all kinds of cars. I mentioned in my post that perhaps the most fun of all were the original Minis that were drifting through the whole sequence.

I also found that section a great challenge when I drove a Caterham there in wet conditions.

[alisdairm]

Very interesting and informative. Great write up Paul.
I wonder how much it would cost to rent for the WEC race in April next year?

[48k]

There's a secondary market for these already, prices start at £850k for a 2 bed with Savilles.

[deaddeadish]

paulguitar said:

I also found that section a great challenge when I drove a Caterham there in wet conditions.

A Caterham in wet conditions, you say? Don't suppose you have video evidence of your epic lap/s?

[paulguitar]

deaddeadish said:

paulguitar said:

I also found that section a great challenge when I drove a Caterham there in wet conditions.

A Caterham in wet conditions, you say? Don't suppose you have video evidence of your epic lap/s?

Funnily enough, I do have an onboard of that day.

In my defence, I am going very slowly because it's on outlap! Enjoy the spin at Stowe at 1.40.

All of the greats (and I think on this evidence we can agree I am amongst the greats) have spun at Stowe.

[Castrol for a knave]

Sandpit Steve said:

This is the investor brochure:
https://escapade.com/pages/silverstone-properties

This is the hotel website:
https://escapade.silverstone.co.uk/

It s designated commercial leasehold property so you re not actually allowed to live there, you choose your visit dates and the hotel will rent it for you when you re not there. There s no ongoing service charges and you can sell up at any time.

I guess there will be some owners who only ever go for the F1, and others who go almost every weekend. It would be interesting to see how busy it gets on regular days without a large spectator event? There s always things going on around the place with various businesses based near the circuit, track days, test days, and the function rooms of The Wing keep pretty busy with conferences and events.

Pretty much it.

The hotel is a separate business but they are holiday use only and owners put their unit into the management company and it forms part of the overall letting inventory, for which they receive a return.

The owners are a mix of private and teams/suppliers. For F1 or major races, it can be more cost effective to have a base in Escapade than trying to place your senior team in various hotels or in motorhomes in the Farm.

Is Bergclimber the poster previously known as Luke?

[paulguitar]

alisdairm said:

Very interesting and informative. Great write up Paul.
I wonder how much it would cost to rent for the WEC race in April next year?

Thanks.

I had a look, but nothing is showing as available for that weekend. It could just be that it is too far away for booking dates to have been released.

[48k]

Sandpit Steve said:

This is the investor brochure:
https://escapade.com/pages/silverstone-properties

This is the hotel website:
https://escapade.silverstone.co.uk/

It s designated commercial leasehold property so you re not actually allowed to live there, you choose your visit dates and the hotel will rent it for you when you re not there. There s no ongoing service charges and you can sell up at any time.

I guess there will be some owners who only ever go for the F1, and others who go almost every weekend. It would be interesting to see how busy it gets on regular days without a large spectator event? There s always things going on around the place with various businesses based near the circuit, track days, test days, and the function rooms of The Wing keep pretty busy with conferences and events.

Whilst it's true there is no ongoing management charges, it's a little - shall we say - cloudy - how the returns are calculated. When you buy one of these places you don't actually buy the asset but instead you buy shares of a company which owns the asset (each residence is owned by a SPV (special purpose vehicle) company, they are all in Companies House as Escapade Silverstone 19, Escapade Silverstone 38, Escapade Silverstone 39 etc), and every quarter Silverstone pays the company a "share of the revenue" in arrears. It's a fair bet that the "share of the revenue" means the gross revenue minus a deduction for operating costs. After all Silverstone have got to get their running costs back somehow.

[Sandpit Steve]

48k said:

Sandpit Steve said:

This is the investor brochure:
https://escapade.com/pages/silverstone-properties

This is the hotel website:
https://escapade.silverstone.co.uk/

It s designated commercial leasehold property so you re not actually allowed to live there, you choose your visit dates and the hotel will rent it for you when you re not there. There s no ongoing service charges and you can sell up at any time.

I guess there will be some owners who only ever go for the F1, and others who go almost every weekend. It would be interesting to see how busy it gets on regular days without a large spectator event? There s always things going on around the place with various businesses based near the circuit, track days, test days, and the function rooms of The Wing keep pretty busy with conferences and events.

Whilst it's true there is no ongoing management charges, it's a little - shall we say - cloudy - how the returns are calculated. When you buy one of these places you don't actually buy the asset but instead you buy shares of a company which owns the asset (each residence is owned by a SPV (special purpose vehicle) company, they are all in Companies House as Escapade Silverstone 19, Escapade Silverstone 38, Escapade Silverstone 39 etc), and every quarter Silverstone pays the company a "share of the revenue" in arrears. It's a fair bet that the "share of the revenue" means the gross revenue minus a deduction for operating costs. After all Silverstone have got to get their running costs back somehow.

Yes, what you’re receiving is a dividend from the company rather than a payment of rent.

The hotel company (subsidiary of Silverstone) will of course have a load of expenses for staffing, marketing, maintenance, housekeeping, IT etc. which will come out first.

The main difference between commerical and residential property as an investment, is that on the managed commercial side like this you have no obligation to do anything expect bank the cheque every quarter. Residential property requires you to be much more actively involved, even if you have a good agent.

The inflexion point of a luxury hotel investment normally comes around 10 years in, when there’s a need to do a full refurbishment, technology update etc. It will be interesting to see how that is handled, but it usually requires the owners to invest in the capex.

[48k]

Sandpit Steve said:

The inflexion point of a luxury hotel investment normally comes around 10 years in, when there s a need to do a full refurbishment, technology update etc. It will be interesting to see how that is handled, but it usually requires the owners to invest in the capex.

That's a really good point. I wonder how many of these residences will suddenly pop up on the market in about 7 years time.

[bergclimber34]

Was under the impression the venue did not actually own the land they were built on, it was rented from another owner, who has presumably now sold it

[Castrol for a knave]

Sandpit Steve said:

48k said:

Sandpit Steve said:

This is the investor brochure:
https://escapade.com/pages/silverstone-properties

This is the hotel website:
https://escapade.silverstone.co.uk/

It s designated commercial leasehold property so you re not actually allowed to live there, you choose your visit dates and the hotel will rent it for you when you re not there. There s no ongoing service charges and you can sell up at any time.

I guess there will be some owners who only ever go for the F1, and others who go almost every weekend. It would be interesting to see how busy it gets on regular days without a large spectator event? There s always things going on around the place with various businesses based near the circuit, track days, test days, and the function rooms of The Wing keep pretty busy with conferences and events.

Whilst it's true there is no ongoing management charges, it's a little - shall we say - cloudy - how the returns are calculated. When you buy one of these places you don't actually buy the asset but instead you buy shares of a company which owns the asset (each residence is owned by a SPV (special purpose vehicle) company, they are all in Companies House as Escapade Silverstone 19, Escapade Silverstone 38, Escapade Silverstone 39 etc), and every quarter Silverstone pays the company a "share of the revenue" in arrears. It's a fair bet that the "share of the revenue" means the gross revenue minus a deduction for operating costs. After all Silverstone have got to get their running costs back somehow.

Yes, what you re receiving is a dividend from the company rather than a payment of rent.

The hotel company (subsidiary of Silverstone) will of course have a load of expenses for staffing, marketing, maintenance, housekeeping, IT etc. which will come out first.

The main difference between commerical and residential property as an investment, is that on the managed commercial side like this you have no obligation to do anything expect bank the cheque every quarter. Residential property requires you to be much more actively involved, even if you have a good agent.

The inflexion point of a luxury hotel investment normally comes around 10 years in, when there s a need to do a full refurbishment, technology update etc. It will be interesting to see how that is handled, but it usually requires the owners to invest in the capex.

Good points, though the freeholder of a hotel will not be footing the cost of the operating inventory refurb.

The leaseholder will pay for that and generally, the value of the lease (or management agreement) will have a suitable sinking fund priced in. Most corporate leases will be let to a "brand" (or in reality, a franchisee who will have to maintain brand standards and adhere to an investment and upgrade programme as part of those brand requirements.

In many cases, the entire demise will be let and the whole of the refurb cost incl FF&E will fall to the tenant, certainly in central London and larger cities i.e. where the letting is on institutional terms.

I can't really say too much but the Escapade structure is reasonably straight forward for owners - It can look a bit complicated at first sight, but it's pretty straightforward and there's nothing unusual about it. There is an audit trail for owners so they can track their return.

[48k]

bergclimber34 said:

Was under the impression the venue did not actually own the land they were built on, it was rented from another owner, who has presumably now sold it

Leasehold is pretty common place for flats and commercial property in the UK.

The BRDC owns Silverstone (the land). Escapade "flats" are each on a 125 year commercial lease from 2024.

[Sandpit Steve]

Castrol for a knave said:

Sandpit Steve said:

48k said:

Sandpit Steve said:

This is the investor brochure:
https://escapade.com/pages/silverstone-properties

This is the hotel website:
https://escapade.silverstone.co.uk/

It s designated commercial leasehold property so you re not actually allowed to live there, you choose your visit dates and the hotel will rent it for you when you re not there. There s no ongoing service charges and you can sell up at any time.

I guess there will be some owners who only ever go for the F1, and others who go almost every weekend. It would be interesting to see how busy it gets on regular days without a large spectator event? There s always things going on around the place with various businesses based near the circuit, track days, test days, and the function rooms of The Wing keep pretty busy with conferences and events.

Whilst it's true there is no ongoing management charges, it's a little - shall we say - cloudy - how the returns are calculated. When you buy one of these places you don't actually buy the asset but instead you buy shares of a company which owns the asset (each residence is owned by a SPV (special purpose vehicle) company, they are all in Companies House as Escapade Silverstone 19, Escapade Silverstone 38, Escapade Silverstone 39 etc), and every quarter Silverstone pays the company a "share of the revenue" in arrears. It's a fair bet that the "share of the revenue" means the gross revenue minus a deduction for operating costs. After all Silverstone have got to get their running costs back somehow.

Yes, what you re receiving is a dividend from the company rather than a payment of rent.

The hotel company (subsidiary of Silverstone) will of course have a load of expenses for staffing, marketing, maintenance, housekeeping, IT etc. which will come out first.

The main difference between commerical and residential property as an investment, is that on the managed commercial side like this you have no obligation to do anything expect bank the cheque every quarter. Residential property requires you to be much more actively involved, even if you have a good agent.

The inflexion point of a luxury hotel investment normally comes around 10 years in, when there s a need to do a full refurbishment, technology update etc. It will be interesting to see how that is handled, but it usually requires the owners to invest in the capex.

Good points, though the freeholder of a hotel will not be footing the cost of the operating inventory refurb.

The leaseholder will pay for that and generally, the value of the lease (or management agreement) will have a suitable sinking fund priced in. Most corporate leases will be let to a "brand" (or in reality, a franchisee who will have to maintain brand standards and adhere to an investment and upgrade programme as part of those brand requirements.

In many cases, the entire demise will be let and the whole of the refurb cost incl FF&E will fall to the tenant, certainly in central London and larger cities i.e. where the letting is on institutional terms.

I can't really say too much but the Escapade structure is reasonably straight forward for owners - It can look a bit complicated at first sight, but it's pretty straightforward and there's nothing unusual about it. There is an audit trail for owners so they can track their return.

That all makes sense, I guess you’re involved in some way in this project so can’t say too much. I’ve worked in hotels and for companies not in the UK who sell regular hotel buildings by room to individual investors, which is a similar but not quite identical business model.

Normally you have a freeholder, a building leaseholder co, a hotel brand (often a franchise as you say) and a complicated legal document between themselves that covers everything. I suspect you’re right that this specific project is not particularly complex to a commercial property lawyer.

The complicating factor here, is that that the owners *really* want to be in their own units at the very peak demand times, which is almost the whole point of the project!

[bergclimber34]

What I mean is, the land they are built on was maybe not owned by the clubor venue, it may have been rented, in the past it was fenced off, and sometimes used for parking. So might not have been owned wholly by the circuit or club

Not sure about the rally, now Porsche area, in the 80s that was just fields behind there so the club must have bought some fields there too.

[Castrol for a knave]

Sandpit Steve said:

That all makes sense, I guess you re involved in some way in this project so can t say too much. I ve worked in hotels and for companies not in the UK who sell regular hotel buildings by room to individual investors, which is a similar but not quite identical business model.

Normally you have a freeholder, a building leaseholder co, a hotel brand (often a franchise as you say) and a complicated legal document between themselves that covers everything. I suspect you re right that this specific project is not particularly complex to a commercial property lawyer.

The complicating factor here, is that that the owners *really* want to be in their own units at the very peak demand times, which is almost the whole point of the project!

We are "market adjacent". I look after real estate finance and investment - lots of developments, PE acquisitions, family office, sovereign wealth, MBO stuff and large scale operators.

I agree- it is always a tension with fractional and aparthotel/timeshare that the premium value is right when you want to be using the thing. Like running a yacht charter and being pissed off you can never sail your own boat during Cowes Week (ahem )

Berg - it is all belt and braces and tied down and all I can say is it is institutional, so BRDC and Escapade have a very good and well structured relationship.

Edited by Castrol for a knave on Wednesday 5th August 16:35

[48k]

bergclimber34 said:

What I mean is, the land they are built on was maybe not owned by the clubor venue, it may have been rented, in the past it was fenced off, and sometimes used for parking. So might not have been owned wholly by the circuit or club

Not sure about the rally, now Porsche area, in the 80s that was just fields behind there so the club must have bought some fields there too.

The BRDC has owned the land at Silverstone since 1971. It's over 700 acres in total.

[coppice]

48k said:

Leasehold is pretty common place for flats and commercial property in the UK.

The BRDC owns Silverstone (the land). Escapade "flats" are each on a 125 year commercial lease from 2024.

I'd read that unlike a normal commercial lease , the lessee can not even occupy the premises all year . Not that you'd want to ... And presumably subletting is ok , with landlord's prior consent ?