The Truscott Arms pub

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Deadline: 3 Mar 2017

Ducalian Capital Ltd (“Ducalian”) is seeking £5 million to acquire and redevelop an award-winning gastropub, The Truscott Arms (the “Pub” or the “Truscott”), in central London. The pub is freehold and located in a high footfall, affluent residential area of Maida Vale. It will be the fourth EIS pub to be acquired and redeveloped by Ducalian.

Of the £5 million target, £4.475 million of investor capital has already been secured so only a further £525,000 is available. We anticipate this will be filled quickly. Update (3.3.2017) – fully subscribed

Highlights

  • Asset backed 
  • Freehold property in prime central London with opportunity for development
  • Buoyant leisure real estate market in London
  • Target returns of 2x money invested (or 1.5x without EIS relief) which the management expects to beat (returns not guaranteed)
  • Proven and professional team personally investing £50,000 in the project 
  • Fundraise target – £5m
  • Closing on 3 March 2017 at latest
  • Minimum investment – £25,000
  • Exit targeted for year four to five

The opportunity

This is a rare opportunity to acquire a substantial high-quality freehold asset in a great location. The Truscott has been a highly successful gastropub which until recently generated £2 million annual revenue. The former manager was forced to close down in summer 2016 due to an unbudgeted hike in rent. Ducalian has since exchanged contracts with the landlord to buy the freehold for £5 million (this equates to £684 per sq. ft.).

The aim is for the Truscott to be immediately refurbished and reopened as a gastropub in Q4 2017. The strategy is to refurbish the original ground floor space, maintaining a classic "pub" feel, develop a garden restaurant at the rear and redevelop the first and second floors into a lounge and private dining areas subject to the necessary consents.

Ducalian will be joined by award-winning chef and restaurateur Chris Barber to manage the development of the Truscott. Chris was Prince Charles’s personal chef for over a decade and has since had a successful career as an acclaimed food writer, restaurateur and business consultant. Chris has achieved numerous successes from high street cafés and pubs to Michelin-starred gastronomy and five-star hotels. Collectively the management team is planning to invest £50,000 in the project.

In addition to the investor capital, please note a further £1.5 million will be raised from bank debt to complete the expansion and redevelopment. Mid-point target returns before EIS tax relief are of approximately 1.5x money invested (over 2x money with EIS relief); however the management expects to significantly exceed this. 

Please note, at the time of writing, EIS advance assurance has not been received for the Truscott. Ducalian expects it shortly.

This short review, like our research report, is not advice, a research recommendation, nor a personal recommendation to buy the investment mentioned. Nor does it constitute due dligence or an audit. Wealth Club aims to highlight investments we believe have merit, but investors should form their own view. You should make your decisions based on the information memorandum and ensure you have read and fully understand it before investing.

Please remember EIS investments are illiquid and capital is at risk. They are not suitable for everyone. Investors should not invest money they cannot afford to lose. The value of tax relief will depend on your circumstances and tax rules could change in future.  14 February 2017

The details

Min. Investment
(CLOSED)
Strategy
Asset backed
Amount Raising
(CLOSED)
Type
single company EIS
Deadline
3 Mar 2017

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