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Duncan Cheslett

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Championship Links Course For Sale - North Wales
« on: December 28, 2012, 12:37:54 PM »
Casting around for a venue for a society meet where we might get to keep our feet dry for once, I chanced upon this;

http://www.humberts-leisure.com/86/article/2489/page.html

Strangely, the ad says the course is freehold, yet the club website says that it is held on a lease from the local authority.

http://www.prestatyngolfclub.co.uk/history.htm

I've never played Prestatyn, but Mark Rowlinson speaks well of it his book 'Golf Courses of North Wales'.  I'm a little taken aback by the price tag, though.

Surely the land occupied by a links golf course is pretty well worthless for any other purpose. As a golf course, surely its value is simply a function of the profit it generates, or has the potential to generate.

With the best will in the world, I can't see how a course like Prestatyn could be expected to give a return on an investment of a million quid, unless a golf resort is built around it.

Trump North Wales, anyone?

« Last Edit: December 28, 2012, 12:41:27 PM by Duncan Cheslett »

Jon Wiggett

  • Karma: +0/-0
Re: Championship Links Course For Sale - North Wales
« Reply #1 on: December 28, 2012, 01:23:53 PM »
Duncan,

I would think it depends on the length of the freehold and whether the entire facilities are included as is. Also, what rights do the membership have and how does the membership subs split up? From a business point of view, a can of worms me thinks unless club has no rights.

Jon

Duncan Cheslett

  • Karma: +0/-0
Re: Championship Links Course For Sale - North Wales
« Reply #2 on: December 28, 2012, 01:41:17 PM »
My understanding from reading the club website is that it is a bog standard members club of the type typical in the UK. Each member owns an equal share in the club.

If it is the club that is for sale together with the leasehold/freehold each member will receive an equal share of the proceeds, after liabilities are discharged.

If it is the course that is for sale, the club will presumably have to do a deal with the new owner over playing rights.

I have heard of proprietor clubs being sold before, but not a members club. I wonder what the problem is...


Speaking of which, it seems that Northenden Golf Club in South Manchester went into administration last week, a matter of days before their centenery.
« Last Edit: December 28, 2012, 01:43:59 PM by Duncan Cheslett »

Jon Wiggett

  • Karma: +0/-0
Re: Championship Links Course For Sale - North Wales
« Reply #3 on: December 28, 2012, 03:56:52 PM »
Ahh, it could be just the ownership of the leasing rights. If so then you would not run the course but just lease it to the club who probably are the long term tenant. In that case a return of 6% would be good making a yearly rent of about £60K for the million pounds.

Northenden in administration, WOW :o. How did they end up there? Solid course and good membership as I remember it though it has been over 20 years.

Jon

Duncan Cheslett

  • Karma: +0/-0
Re: Championship Links Course For Sale - North Wales
« Reply #4 on: December 28, 2012, 11:55:49 PM »
Ahh, it could be just the ownership of the leasing rights. If so then you would not run the course but just lease it to the club who probably are the long term tenant. In that case a return of 6% would be good making a yearly rent of about £60K for the million pounds.

That's what I mean; £60k pa sounds like an unsustainably large rent for a members club in that area where membership rates and green fees are amongst the lowest in the Briitish Isles.

Northenden in administration, WOW :o. How did they end up there? Solid course and good membership as I remember it though it has been over 20 years.

Jon

I don't want to say too much because it is a subject of much local gossip and I keep hearing conflicting stories. Th crux of it seems to be however, that they embarked on a hugely expensive programme of course improvements back in 2005 including 18 new USGA greens.


The bank financed the work to the tune of half a million quid and now they want it back!

On the bright side, the course is utterly unsuitable for any other use, forming the flood plain of the River Mersey. I expect to see a pre-pack deal done via an insolvency practioner, a new company rise from the ashes with minimal debt, and the bank royally shafted! ;D


Northenden's story tends to confirm my suspicions about Prestatyn. If a 'wealthy' club like Northenden stuggles to pay back half a million quid over ten years, how on earth is a relative pauper like Prestatyn going to to pay a rent of £60k pa?
« Last Edit: December 29, 2012, 12:28:42 AM by Duncan Cheslett »

Jon Wiggett

  • Karma: +0/-0
Re: Championship Links Course For Sale - North Wales
« Reply #5 on: December 29, 2012, 03:39:21 AM »
Yes Duncan, sounds like a tough one in Wales. Maybe the new owners would offer a deal like £10K per day of the week use which would allow the club to set its own lease costs. Not very appetising. Of course the best would be for the club to organise a buy out itself. If they get 200 members to spend £5K each then they are there. The club could then slowly buy them out.

As for Northenden, yet another example of wasting money chasing an unrealistic dream.

Jon

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