53 SOUTH EAST MULTI-LET INDUSTRIAL INVESTMENT

Transcription

1 UNITS TO37 53 SOUTH EAST MULTI-LET INDUSTRIAL INVESTMENT POTTERS LANE MILTON KEYNES MK11 3HQ

2 INVESTMENT SUMMARY Milton Keynes is a recognised light Industrial and distribution location in the UK strategically located adjacent to the M1 Situated on the established Kiln Farm Industrial Estate, which provides access to Junction 14 of the M1 via the A5 and A509 dual carriageways Multi-let Industrial estate comprising 17 units (four sold off on long leases), let to six tenants on ten leases, with one vacant unit Producing a current income of 307,322 pa reflecting a low average rent of 4.07 per sq ft The property comprises a gross internal area of 8, sq m (89,360 sq ft) of industrial warehouse accommodation. After allowance for the units sold off on long leases the estate provides 75,386 sq ft of lettable accommodation WAULT of 6.86 years to expiry and 3.11 years to breaks (excluding long leases) Site area of 2.49 hectares (6.16 acres), providing a low site density of just 31% Freehold Excellent asset management opportunities, including letting the vacant unit and re-gearing existing leases. All tenants are in full occupation We are seeking offers in excess of 3,400,000 (Three Million, Four Hundred Thousand Pounds), subject to contract, for the freehold interest, which reflects a net initial yield of 8.54% after allowing for purchaser s costs of 5.80% and a low capital value per sq ft of Upon letting the vacant unit the yield will rise to a reversion of 9.17%

3 1 Km To A5 Pitfield Road Millers Way TO37 UNITS 53 A5

4 LOCATION Milton Keynes, situated in the county of Buckinghamshire, has become a well established commercial centre due to its strategic location and considerable amount of inward investment. The town is located approximately 55 miles north of London, 70 miles south east of Birmingham and 20 miles south of Northampton. Motorway access is excellent being located adjacent to the M1, Junction 14 being closest to central Milton Keynes and Junction 13 being located just to the south east of the town centre. The M1 provides direct access to London to the south and the national motorway network including Birmingham via the M6 motorway, the West Midlands and the north. Communication links are excellent, being served by the recently upgraded West Coast Inter City rail line providing a frequent and direct rail service to London Euston and Birmingham with a journey time of 35 and 50 minutes respectively. London s Heathrow and Luton, Birmingham International and East Midlands International airports are all located within 70 miles. Milton Keynes has an urban area population of 184,506 and a district population of 207,057 with a catchment population (within 20 km of the town centre) of 359,331. The town has been the fastest growing urban area in Britain with the Borough s population estimated to have grown by 50,000 to approximately 260,000 by Milton Keynes has experienced considerable growth due to its particularly good infrastructure network and its strategic location adjacent to the M1 between London and Birmingham. These factors have enhanced its popularity with distribution and industrial occupiers. Milton Keynes boasts one of the highest start up rates in the country. Between 1998 and 2008 the number of business in Milton Keynes increased by 36%. Milton Keynes has been rated as the most attractive local authority area in England for prospective businesses & investment, which has lead to continuing inward investment and growth. M42 M42 Birmingham Derby M40 M1 M6 Oxford M1 SITUATION Northampton M40 Milton Keynes Milton Keynes MK11 3HQ M1 M25 Pererborough A1(M) Cambridge M25 London The property is located on Kiln Farm, an established industrial and distribution location in Milton Keynes situated approximately 4 miles north west of the town centre. The wider Kiln Farm Industrial Estate comprises a broadly L-shaped site and is bordered by Miller s Way, Watling Street, Monk s Way and the A5 dual carriageway. To the south of the Estate is open land whilst to the east is the Abbey Hill Golf Course together with some residential accommodation. Kiln Farm is situated approximately 7 miles from Junction 14 of the M1 which is accessed via Miller s Way and the A5. Access to Junction 13 of the M1 can also be achieved via the A5 and A41 dual carriageways which run along the southern boundary of Milton Keynes. Potters Lane Industrial Estate is positioned on the eastern side of Kiln Farm and situated on the southern side of Potters Lane. Occupiers on Kiln Farm include Royal Mail, Norbert Dentressangle, Pacific Logistics and Metaltex (UK). M11 GREAT MONKS WAY MILLERS WAY Potters Lane MK11 3HQ A5 Abbey Hill Golf Course MONKS WAY Abbey Hill Golf Course

5 DESCRIPTION The Potters Lane units were constructed in the late 1970s and consist of 17 units in two outward facing terraces with loading off a spine road leading to loading canopies down the centre of the two terraces. Both terraces have car parking to the front office elevations. Units are larger with an eaves height of approximately 5.40 metres. These units also benefit from part first floor space utilised as office accommodation. Units have a lower eaves height of approximately 4.20 metres and benefit from internal part mezzanine areas. The buildings are steel portal frame construction with vertically profiled steel sheet cladding. The roofs of both terraces were overclad in 2010 at the cost of the landlord. All units benefit from 3-phase power and other main services. The units also benefit from gas fired warm air blower heating to the warehouse/production areas, with gas fired radiator heating, with additional heating and lighting to the office areas. Loading to the units is via roller shutter doors to the rear. NERS LANE SO POTTERS LANE El Sub Sta ENERGY PERFORMANCE All units have a rating lower than 82, with the majority being classed in band C. The certificates are available upon request. The Units have the following EPC ratings: Unit 37, 38, 39 & 40, 41, 42 & 43, 44, 47, 48, 49, 50, 52,53 EPC Band 45, 46, 51 D C SITE KILN FARM The site is generally level and rectangular in shape, extending to approximately 2.49 hectares (6.16 acres) providing a low site cover of just 31%.

6 TENANCIES The property is multi-let to six tenants on ten separate FRI leases with four units sold off on a long leasehold basis. The units produce a total income of 307,322 per annum. All of the leases are contracted out of the security of tenure provisions afforded by the 54 Act, with the exception of the occupiers of units 44 and 53. DRS Data Services Ltd occupies five units which produce a rent of 169,775 per annum accounting for 55.24% of the income. The property benefits from a strong weighted average income to expiries of 6.86 years and 3.11 years to breaks. TENURE Freehold Unit Area (Sq ft) Tenant Lease Start Date Term (years) Lease End Date Unit 37 8,269 DRS Data Services Ltd 01/12/ /11/2021 Unit 38 8,226 DRS Data Services Ltd 01/12/ /11/2021 Unit 39 & 40 10,878 DRS Data Services Ltd 01/12/ /11/2021 Unit 41 5,445 DRS Data Services Ltd 25/04/ /11/2021 Unit 42 & 43 10,876 DRS Data Services Ltd 01/12/ /11/2021 Break Option Rent (per annum) Rent (per sq ft) 32, , , , , Comments Unit 44 12,907 Advanced Plastic Technology Ltd 19/01/ /01/ /01/ , Rent Review 19/01/2020. Unit 45 4,715 Vacant N/A N/A 0 Unit 46 4,663 Alba Engineering 24/12/ /12/ Unit 47 4,691 HTS Scales UK Ltd 23/12/ /12/ Unit 48 2,331 Omega Lighting Ltd 06/07/ /07/ , Unit 49 2,313 G Hatton Fabrications Ltd 15/07/ /07/ /12/ , Unit 50 2,326 Reynolds Engineering Ltd 06/01/ /01/ , Unit 51 2,311 Iqbal Ahmed Saigal 25/12/ /12/ Unit 52 2,309 John Briars 25/12/ /12/ Unit 53 7,100 Tascor Services Ltd 01/04/ /05/ /05/ , Total 89, ,322 01/12/2015 and capped at 3% pa compounded. Rent free from 01/12/2015 for 4 months - Vendor to top-up. Schedule of Condition. 01/12/2015 and capped at 3% pa compounded. Rent free from 01/12/2015 for 4 months - Vendor to top-up. 01/12/2015 and capped at 3% pa compounded. Rent free from 01/12/2015 for 4 months - Vendor to top-up. 01/12/2015 and capped at 3% pa compounded. Rent free period to 25/10/ Vendor to top-up. 01/12/2015 and capped at 3% pa compounded. Rent free from 01/12/2015 for 4 months - Vendor to top-up. Service Charge Shortfall 2, per annum. Rateable Value 20,250. Unit refurbished at a cost of 34, months notice to activate break, further break event on 15/07/ months notice to activate break, further break on 31/05/2016 and 31/05/2017. Schedule of Condition The current service charge budget for the year ending 31 March 2015 is 44, per annum which equates to 0.50 per sq ft.

7 COVENANT The most up to date financial accounts for the covenants are listed below, all figures are in 1,000 s: Unit Tenant Date Turnover ( ) Pre-Tax Profit ( ) Net Worth ( ) % of Income DRS Data Services 31/12/ ,095 1,123 4, % 44 Advanced Plastic Technology Ltd 30/04/2013 n/a n/a % 48 Omega Lighting Ltd 31/12/2012 n/a n/a % 49 G Hatton Fabrications Ltd 28/02/2014 n/a n/a % 50 Reynolds Engineering Ltd 31/10/2013 n/a n/a % 53 Tascor Services Ltd 31/12/ ,528 5, % OCCUPATIONAL MARKET COMMENTARY There is an estimated 28.3 million sq ft of industrial stock in Milton Keynes which can be broken down into 65% warehouses and 35% multi-let industrial units. Responding to market conditions prime rents have returned to a peak of 6.75 per sq ft for Grade A units, which over the last 18 months has represented a 15% rental growth in headline rents. To date, 2014 has seen a continuation of this trend, with 37 lettings under 20,000 sq ft having already completed totalling 172,057 sq ft, with a further 8 units over 20,000 sq ft also transacting. This has now led to particularly tight supply within the Kiln Farm area, where there are just five units currently available between 3,000 sq ft and 7,000 sq ft. Enquiry levels remain strong and there is increased competition for good quality buildings. This has resulted in incentives and marketing periods shortening. It is estimated that by the end of 2014 take up will have reached 360,000 sq ft. At current levels, the vacancy rate in Milton Keynes stands at an estimated 6.8%, compared to a national average of 7.3% for the similar industrial centres. Given the imbalance of supply and demand within this unit size range, we believe the property provides an excellent platform for rental growth given the low passing rents. INVESTMENT MARKET COMMENTARY As general investment activity continues to gather pace, industrial assets continue to be particularly sought after. There have been a number of recent transactions in the multi-let market which we highlight as follows: Date Address WAULT Price Initial Yield Gross Cap Val psf Aug-14 Stacey Bushes Industrial Estate, Milton Keynes m 7.76% Jul-14 Grandby Industrial Estate, Milton Keynes m 7.10% Apr-14 Airport Executive Park, Luton m 6.36% Feb-14 Crownhill Business Centre, Milton Keynes m 8.62% Aug-13 Paragon, Milton Keynes m 7.71% Jan-13 Danbury Court, Milton Keynes m 8.89% 78.78

8 VAT We understand that the property is elected for VAT. It is intended that the transaction is treated as a TOGC (transfer of a going concern). PROPOSAL We are seeking offers in excess of 3,400,000 (Three Million, Four Hundred Thousand), subject to contract for the freehold interest in the property. This reflects a net initial yield of 8.54% after allowing for the usual purchaser s costs of 5.80% and a low capital value per sq ft of Upon letting the vacant unit the yield will rise to a reversion of 9.17%. FURTHER INFORMATION For further information or to arrange a viewing, please contact: Charlie Lake clake@lsh.co.uk T: Nick Lloyd nlloyd@lsh.co.uk T: Ben Thompson bthompson@lsh.co.uk T: UK House, 180 Oxford Street London W1D 1NN T: F: Further information is also available at Misrepresentation Act 1967: Lambert Smith Hampton for themselves and for the vendor(s) or lessor(s) of this property whose agents they are, give notice that: 1. These particulars do not constitute, nor constitute any part of, an offer or contract. 2. None of the statements contained in these particulars as to the property are to be relied on as statements or representations of fact. 3. Any intending purchaser or lessee must satisfy himself by inspection or otherwise as to the correctness of each of the statements contained in these particulars. 4. The vendor(s) or lessor(s) do not make or give and neither Lambert Smith Hampton nor any person in their employment has any authority to make or give, any representation or warranty whatever in relation to this property. Finance Act 2013: Unless otherwise stated all prices and rents are quote exclusive of VAT. The Business Protection from Misleading Marketing Regulations 2008: These details are believed to be correct at the time of compilation but may be subject to subsequent amendment. All maps and plans are for indicative purposes only. Lambert Smith Hampton: September 2014 Produced by Barbican Studio: +44(0)