Investment Sale Sainsbury s Distribution Centre, Riverside Industrial Estate, St Albans AL2. Investment Opportunity

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Cathleen Harris
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1 Investment Sale Sainsbury s Distribution Centre, Riverside Industrial Estate, St Albans AL Investment Opportunity

Sainsbury s Distribution Centre, Riverside Industrial Estate, St Albans AL M5 Executive Summary This investment offers an excellent opportunity to acquire a strategic M5 distribution facility.

2 Sainsbury s Distribution Centre, Riverside Industrial Estate, St Albans AL M5 Executive Summary This investment offers an excellent opportunity to acquire a strategic M5 distribution facility. The salient points are: Located in the established industrial area of London Colney, south-east of St Albans, benefiting from excellent road communications 0.5 miles to the M5 (Junction ) providing quick and easy access to both the A(M) and M Property comprises a large (8,495 sq ft) distribution unit on c. 5 acres with 8 loading docks Key Sainsbury s operational centre with tenure on the site in excess of 5 years and a renewed commitment for a further minimum 5 years The property will be let to NFT Distribution Holdings Ltd ( NFT ) and operated by NFT who will take a new lease for a term of 0 years, with a tenant only break option exercisable after the fifth anniversary (subject to months notice). The passing rent is,550,000 per annum Sainsbury s Supermarkets Ltd will take a new sublease from NFT to coincide with the head lease and on the same terms. The leases have been agreed without rent free periods, so income is receivable immediately Occupied by Sainsbury s and serves 8 of the South East stores Medium term opportunity for redevelopment, subject to planning Freehold We are instructed to seek offers of 9,000,000 (Twenty Nine Million), subject to contract, for the freehold interest, which reflects a net initial yield of 8.%, after allowing for the usual purchasers costs of 5.80%.

3 7 8 o Tennis Courts a El Sub Sta MORRIS WAY Club CHANTRY LANE 7.4m 8 9 a 77 44a b Pavilion a 7 Playground Allotment Gardens River View Osier Morris Recreation Ground FB P 49 LB TCB 67.m Depot Vicarage FB El Sub Sta Ford (Not suitable for motor vehicles) Colneford St Peter's Church El Sub Sta Car Park 5 Works Waterside House 6 6a Borderlake House Ford 0 Bridge House Colne House 66.m 4 0a Bull A 08 The Bull (PH) 6 s Posts Briar Victor House 5 Willow Midhurst 4 Depot 0 Berkley House 4 4 Pond m a 8 a 4 Def 40 Def The Colney Fox (PH) A 08 Cattle Grid Foot Bridge a Water CS 40 Drain Watersplash Court to SM Sainsbury s Distribution Centre, Riverside Industrial Estate, St Albans AL Sainsbury s Distribution Centre Riverside Industrial Estate St Albans WHITE El Sub Sta 7 9.8m RH Track Location St Albans is located in the prosperous county of Hertfordshire, within the North West corridor of the M5. It has a district population of approximately 9,000 with a further,400,000 people within miles of the centre. The city is an important regional hub with a good strategic location. It is situated approximately 0 miles north-west of Central London and approximately 0 miles south of Luton, while other nearby towns include Watford (7 miles), Hatfield (7 miles) and Hemel Hempstead (7 miles). The location benefits from excellent road and rail communications to both London and the Midlands with junction a and of the M5 being situated only miles to the south west of the city. Junction 7 of the M is situated approximately 4 miles to the west via junction of the M0. The A44 provides quick access to the M and A while the A405 and A08 provides direct links with the M5 at Junction a and respectively. Mainline railway services are provided from St Albans Railway Station approximately.5 miles to the north of the property with regular service every 5-0 minutes to Kings Cross London St Pancras International with an approximate journey time of 6 minutes. The railway station also provides a fast and regular Thameslink service to the closest international airport, Luton Airport, as well as other major international airports such as Gatwick, Heathrow and Stansted. St Albans is recognised as one of the country s most affluent cities with a cathedral and historic buildings that draw in approximately 50,000 tourist each year. It has a diverse and stable local economy which is dominated by the service sector industries. Major service employers include the district council and National Pharmaceutical Association, whilst financial and business services include Nationwide Trust, Post Office Counters, Price Waterhouse Coopers and KPMG. There are also some key manufacturing employers located in the area including Polaroid and United Glass. Situation The subject property is located on the Riverside Industrial Estate lying south-east of St Albans city centre in the recognised industrial area of London Colney. The estate comprises a total of seven units but is dominated by the subject property which forms the largest. The estate is accessed via Lowbell Lane which has direct access to the London Colney by Pass (A08), which provides quick and direct routes to the M5 and other major road links such as the A44. ST ANNE'S ROAD 6 to 7 The White Lion (PH) RICHARDSON CLOSE Bramley ROBINS CLOSE Lakeview HIGH STREET BURR CLOSE (TRACK) 5 7 RICHARDSON WATERSIDE CLOSE Watermede to 5 The Green Dragon (PH) 0m 50m 00m 50m RIVERSIDE Riverside Industrial Estate Telford Arches Bridge Summerville The Millstone WATERSIDE Summers Way Riverside Depot River Colne Areas hatched in green have been sold off Freehold. There is an alternative estate access route available via Barnet Road. Ordnance Survey Crown Copyright 0. All rights reserved. Licence number Plotted Scale - :500 Other major occupiers on the Riverside Estate include Securicor-DHL who occupy units and, Texmore Trading Co Ltd who occupy unit and Orfare Limited who occupy unit 7. Depot El Sub Sta Colne WILLOWSIDE BARNET ROAD (Day Nursery) Nightingale The Willows ARMSTRONG CLOSE COLNE GARDENS LOWBELL LANE COLNBROOK CLOSE Und Path Co Const, CP & ED Bdy MOUNT VIEW Drain Crown Copyright 0. All rights reserved. Not to scale. River Colne

Sainsbury s Distribution Centre, Riverside Industrial Estate, St Albans AL Description The property comprises two integrated warehouse units totalling approximately 8,495 sq ft gross internal area.

4 Sainsbury s Distribution Centre, Riverside Industrial Estate, St Albans AL Description The property comprises two integrated warehouse units totalling approximately 8,495 sq ft gross internal area. The main warehouse was constructed in the 970s, with an extension to the western section of the warehouse added later in 994. Externally, both units are of a steel frame construction with a pitched metal profile covered roof. The units are served by a total of 8 tailgate loading docks. Internally, the extension and part of the main warehouse incorporate two chilled store areas, with the chill store in the eastern section of the warehouse being fitted in 005 and the other in 99. The remainder of the warehouse is used as ambient storage, with a clear eaves height of 8.8m. Specification of the warehousing includes solid concrete floors and strip lighting, with the main warehouse fitted with sprinkler system throughout. The main office suites are located at first floor level and are fitted out to a modest specification incorporating suspended ceilings, strip lighting and radiator heating. There are two processing office areas within the warehouses. In addition the property provides extensive lorry and car parking facilities with a large main yard containing a fuelling area, lorry wash facilities and substantial car parking provision. The property occupies a site with prominent frontage to the A08 and we understand an approximate total site area of 5 acres. Accommodation The property provides 8,495 sq ft, on a Gross Internal Area basis, of warehouse accommodation. The main warehouse was constructed in the 970s, with an extension to the western section of the warehouse added later in 994. Tenure The property is held Freehold. The property is held in a Special Purpose Vehicle which could be acquired by the purchaser.

5 Sainsbury s Distribution Centre, Riverside Industrial Estate, St Albans AL Tenancy The property will be let to NFT Distribution Holdings Ltd ( NFT ) who will take a new lease for a term of 0 years, with a tenant only break option exercisable after the fifth anniversary (subject to months notice). The passing rent is,550,000 per annum (subject to a schedule of condition). Sainsbury s will take a new sublease from NFT to coincide with the head lease and on the same terms. Operational Activity The property has been a core operational centre for Sainsbury s over the past 5 years for which NFT have serviced the management contract since 990. The warehouse forms part of Sainsbury s core South East operational strategy, delivering to 8 stores within the region. The NFT management contract shall be extended for a further five years (commencing with the sub-lease) demonstrating Sainsbury s continued commitment to the site. Whilst NFT also provide services to other supermarket operators, the aggregate Sainsbury s contracts comprises approximately 40% of NFT s revenue. NFT operate other Sainsbury s distribution facilities around the country driven by a strong relationship in unison with NFT s efficient operational management. Building Improvements The property has undergone various improvements, most recently including the addition of extra chilled capacity in 005 undertaken by NFT and recorded as a tenant s improvement. Subsequently these additions are disregarded at rent review however Sainsbury s meet the costs of the improvements through a finance agreement for a fixed term, the latest of which extending for a further 8 years. NFT also recently installed a new 80,000 lighting system structured on a similar basis as to previous improvements, with Sainsbury s again meeting the costs through a fixed term finance agreement. Sainsbury s and NFT have jointly financed significant improvements to the building over the short-mid term history, with a running total in the region of 4 million since 000 with approximately.m being invested in the property since 005. Sainsbury s and NFT continue to upgrade the building with works currently being formalised to include the new 80,000 lighting system and yard improvements of circa 400,000. NFT Distribution Holdings Limited NFT is the market leader in the provision of time critical logistics services to food and drink manufacturers and grocery retailers. Since 006 NFT has been an independent business, backed by a combination of its management team and Phoenix Equity Partners. Despite the current economic climate, the company continues to go from strength to strength. This is largely due to two key factors: NFT s trusted reputation over 0 years in the time critical logistics industry, and Major investments in infrastructure, systems and people to take the company forward For more information please visit the company website The company has a Creditsafe rating of 94/00 representing Very Good credit worthiness with a Low Risk of business failure. The most recent accounts are below: Date of /0/0 /0/00 /0/009 Accounts Turnover 40,899,000 7,7,000 6,85,000 EBITDA 8,700,000 6,900,000* 7,00,000 Pre Tax Profit,88,000 -,50,000-0,000 Shareholder Funds 4,88,000,09,000 4,09,000 *00 EBITDA variation is largely the result of a new site being opened in Daventry.

Sainsbury s Distribution Centre, Riverside Industrial Estate, St Albans AL Sainsbury s Sainsbury s Supermarkets Ltd is a major subsidiary of Sainsbury s plc which was founded in 869 and today

6 Sainsbury s Distribution Centre, Riverside Industrial Estate, St Albans AL Sainsbury s Sainsbury s Supermarkets Ltd is a major subsidiary of Sainsbury s plc which was founded in 869 and today operates a total of 94 stores comprising 557 supermarkets and 77 convenience stores. Sainsbury s plc jointly owns Sainsbury s Bank with Lloyds Banking Group and has two property joint ventures with Land Securities Group PLC and The British Land Company PLC. They now serve over million customers a week and have a market share of over 6 per cent. Their large stores offer around 0,000 products and they offer complementary non-food products and services in many of their stores. An internet-based home delivery shopping service is also available to nearly 9 per cent of UK households. They employ over 50,000 colleagues. For more information please visit the company website The company has a Creditsafe rating of 96/00 representing Very Good credit worthiness with a Low Risk of business failure. The most recent accounts are below: Date of 9/0/0 0/0/00 /0/009 Accounts Turnover,00,000,000 9,96,000,000 8,90,000,000 Pre Tax Profit 775,000,000 56,000, ,000,000 Shareholder Funds 4,067,000,000,60,000,000,54,000,000

7 Sainsbury s Distribution Centre, Riverside Industrial Estate, St Albans AL Sainsbury s Occupation Sainsbury s have remained at the site since initial occupation over 5 years ago, with constant renewals of their management contract with NFT. Their continued use and operation of the site has centred around their supermarket expansion business model. This year, they have opened new stores, with 4 extensions and 47 convenience stores, equivalent to.5 million sq ft of gross new space, or 8.5 per cent growth year-on-year. In the two years to March 0 they have grown their gross space by 5.9 per cent, beating the 5 per cent target they set in March 009. Their extensions are largely in the South and East where they are principally introducing or extending their non-food offering. They expect to maintain this momentum into next year, growing gross space by seven to eight per cent in 0/ including 5-0 new stores, 5-0 extensions and one to two convenience stores a week. In future years, they plan to add around.5 million sq ft of new space per year and they expect to continue to be able to secure new development opportunities as quickly as they open stores. The retail element of the Sainsbury s business model is dependent upon the distribution of goods through their servicing warehouse centres, in particular St Albans which is being operated at ever increasing efficiency and dependence for the South East region. St Albans is a key centre in this respect through its servicing of 8 stores in this region. The St Albans distribution unit has been integral in Sainsbury s growth within the South East being a key distribution centre for over 5 years. Planning We have made verbal enquiries of the local authority and understand that the lawful use of the property is as warehousing with ancillary offices, servicing area, car parks and related works as established in the planning permission dated 0 December 980 (ref 5/80/80). We understand that a further planning permission was granted in September 99 for an extension to the property together with permission for re-cladding of the existing building. A further planning permission was granted in September 005 for a change of use to incorporate cold store accommodation. The planning authorities confirmed that the property is not subject to any enforcement action. We have been further advised that the property is not listed. Planning policy for the area is contained within the St Albans District Plan, which was adopted in November 994. The property is located in an area zoned for Employment use (use classes B, B and B8). Other uses could be considered for the site in due course, subject to the necessary consents being obtained. Environment The site has a history of industrial uses and further survey and ground condition reports are available on request. Capital Allowances There may be Capital Allowances available to the purchaser. More information can be provided on request. VAT The property is elected for VAT. It is envisaged that the sale will be structured as a Transfer of a Going Concern (TOGC) and as such VAT should not be payable. Proposal We are instructed to seek offers of 9,000,000 (Twenty Nine Million), subject to contract and exclusive of VAT, for the freehold interest, which reflects a net initial yield of 8.%, after allowing for the usual purchasers costs of 5.80%.

Sainsbury s Distribution Centre, Riverside Industrial Estate, St Albans AL Contacts Lambert Smith Hampton John Knowles United Kingdom House, 00 798 8 80 Oxford Street, jknowles@lsh.co.

8 Sainsbury s Distribution Centre, Riverside Industrial Estate, St Albans AL Contacts Lambert Smith Hampton John Knowles United Kingdom House, Oxford Street, jknowles@lsh.co.uk London WD NN Mike Adcock madcock@lsh.co.uk Richard Maxwell rmaxwell@lsh.co.uk Further information on the property can be obtained from: Subject to Contract and Exclusive of VAT Lambert Smith Hampton January 0 Disclaimer: Lambert Smith Hampton Group Limited and its subsidiaries and their joint agents if any ( LSH ) for themselves and for the seller or landlord of the property whose agents they are give notice that: (i) These particulars are given and any statement about the property is made without responsibility on the part of LSH or the seller or landlord and do not constitute the whole or any part of an offer or contract. (ii) Any description, dimension, distance or area given or any reference made to condition, working order or availability of services or facilities, fixtures or fittings, any guarantee or warrantee or statutory or any other permission, approval or reference to suitability for use or occupation, photograph, plan, drawing, aspect or financial or investment information or tenancy and title details or any other information set out in these particulars or otherwise provided shall not be relied on as statements or representations of fact or at all and any prospective buyer or tenant must satisfy themselves by inspection or otherwise as to the accuracy of all information or suitability of the property. (iii) No employee of LSH has any authority to make or give any representation or warranty arising from these particulars or otherwise or enter into any contract whatsoever in relation to the property in respect of any prospective purchase or letting including in respect of any re-sale potential or value or at all. (iv) Price or rent may be subject to VAT and any prospective buyer or tenant must satisfy themselves concerning the correct VAT position. (v) Except in respect of death or personal injury caused by the negligence of LSH or its employees or agents, LSH will not be liable, whether in negligence or otherwise howsoever, for any loss arising from the use of these particulars or any information provided in respect of the property save to the extent that any statement or information has been made or given fraudulently by LSH. (vi) In the case of new development or refurbishment prospective buyers or tenants should not rely on any artists impressions or architects drawings or specification or scope of works or amenities, infrastructure or services or information concerning views, character or appearance and timing concerning availability or occupation and prospective buyers or tenants must take legal advice to ensure that any expectations they may have are provided for direct with the seller or landlord and LSH shall have no liability whatsoever concerning any variation or discrepancy in connection with such matters.

Investment Sale. Modern Freehold Industrial Warehouse Investment. Aspect House Spencer Road Church Hill Industrial Estate Lancing West Sussex BN15 8UA

Investment Sale. Modern Freehold Industrial Warehouse Investment. Aspect House Spencer Road Church Hill Industrial Estate Lancing West Sussex BN15 8UA Investment Sale Modern Freehold Industrial Warehouse Investment Aspect House Spencer Road Church Hill Industrial Estate Lancing West Sussex BN15 8UA Executive Summary Located on the South Coast between