Investment Sale Units K1, K2 & K3, Kiln Farm Pitfield, Milton Keynes Buckinghamshire, MK11 3LW. Long Let Industrial Investment

Transcription

1 Investment Sale Units K1, K2 & K3, Kiln Farm Pitfield, Milton Keynes Buckinghamshire, MK11 3LW Long Let Industrial Investment

2 Investment Summary Milton Keynes is a recognised distribution location in the UK strategically located on the M1. Well situated on the established Kiln Farm Industrial Estate. Excellent road links being located off Miller s Way which provides direct access to the Junction 14 of the M1 via the A5 and A509 dual carriageways. Multi-let 3 unit industrial estate. The property comprises a gross internal area of 11, sq m (120,609 sq ft) of industrial warehouse accommodation. Current rental income of 438,012 pa reflecting a low average rent of 3.63 per sq ft. Average weighted unexpired term of over 12 years to lease expiries, with no break events. Site area of approximately 2.49 hectares (6.15 acres). Freehold. Low gross capital value of per sq ft. We are seeking offers of 4,250,000 (Four Million, Two Hundred and Fifty Thousand Pounds), subject to contract, for the freehold interest, which reflects a net initial yield of 9.74% after allowing for purchaser s costs of 5.80%.

3 Millers Way A5 A5 A5 Millers Way Gt Monks Way A422 Monks Way Pitfield Monks Way A5 Location Milton Keynes, situated in the county of Buckinghamshire, has become a well established commercial centre due to its strategic location and a 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 Watling St Watling St Calverton Ln The High St Great Monks St Watling St Danstead Way Danstead Way Milton Keynes has experienced considerable growth due to its particularly good infrastructure network and its strategic location on the M1 between London and Birmingham. These factors have enhanced its popularity with distribution and industrial occupiers. The town has been particularly successful in attracting large companies such as Mercedes Benz, VAG and Abbey National. Other major occupiers include Marconi Defence, John Lewis Partnership, Mobil Oil, Legal & General, Rank Xerox and Coca Cola. Situation The subject property is located in an area known as Kiln Farm, which is an established industrial and distribution location in Milton Keynes situated approximately 4 miles north west of the town centre. Occupiers on Kiln Farm include Tesco, Royal Mail, TNT UK Ltd, Norbert Dentressangle, Pacific Logistics and Metaltex (UK), Christian Salvesen and IBM. 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. Portway The property is situated on the southern side of Pitfield at the Junction with Burnleys. Pitfield runs parallel to Watling Street and links Miller s Way in the north to Monk s Way in the south. Monk s Way provides direct access to the A5 dual carriageway at the Abbey Hill roundabout. 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. The subject property is centrally located within the Estate. To the south of the Estate is open land whilst to the east is the Abbey Hill Golf Course together with some residential accommodation. Crown Copyright All rights reserved. Not to scale.

4 Description The property was constructed in the late 1980s and comprises a development of 3 warehouse / production units known as K1, K2 and K3. K1 and K3 are connected via a covered link whilst K1 and K2 each benefit from a 2 storey office / ancillary block. The buildings are of steel portal frame construction and benefit from a combination of brickwork walls and profiled metal sheet wall and roof cladding with approximately 10% translucent roof lights, concrete screed floors, sodium spotlights and sprinkler systems. K1 has a minimum clear internal eaves height of 6 metres and a maximum of 6.95 metres to the apex, 1 roller shutter door and a small 2 storey storage area along the south west wall of the property. K2 benefits from a minimum eaves height of 6.98 metres and a maximum of 8.00 metres, 2 roller shutter doors and a third dock leveller loading bay. K3 benefits from a minimum eaves height of 4.32 metres and a maximum of 5.63 metres and 2 roller shutter doors. The office areas have generally been fitted out to a good quality. In K1 they benefit from central heating and solid floors with strip lighting at ground floor level and suspended ceilings incorporating Cat 2 lighting at first floor level along with a kitchenette and an 8 person lift providing access between the ground and first floors. The offices in K2 are of a similar standard with an additional office area which protrudes from the front office block into the warehouse providing a mix of storage and office accommodation. WC facilities are provided at both ground and first floor level. Each unit benefits from its own secure yard area and parking and has its own separate access from the public highway. The units benefit from a good car parking provision with K1 having 38 spaces, K2 having 57 spaces and K3 having 18 spaces. Site The site is generally level and comprises an L-shape extending to approximately 2.49 hectares (6.15 acres) providing a site cover of 45%. Tenure Freehold.

5 Tenancies Unit Tenant Demise Sq M Area Lease Rent Sq Ft Start (Rent Review) Expiry (Break) pa psf K1 Centrex Computing Services Limited Warehouse Offices 2, , , ,475 10,957 39, ( ) ,012* 3.50 K2 KED Logistics Ltd Warehouse, Store Offices Loading Bay 3, , ,528 1,304 8, , ( ) , K3 Keyne Express Deliveries Warehouse 2, , ( ) , Total 11, , ,012 *3 month s rent free to be granted to the tenant from the start of the 6th year of the term of the lease. Tenant s covenants KED Logistics Limited (Company No ), who also trade as Keyne Express Deliveries (Company No ), is a logistics company established in 1985 and run by the same management company since its inception. The business is focussed on UK and European logistics with temperature controlled and same day capabilities. KED Logistics Limited has occupied Unit K2 for over 8 years and has recently expanded into unit K3 and trading as Keyne Express Deliveries. The lease of unit K2 benefits from a personal guarantee of 66,000 and the lease of unit K3 benefits from a personal guarantee of 24,000, both from the principal shareholder of KED Logistics Ltd and Keyne Express Deliveries, Edward Jarvis. Further information on the company can be found on their website Centrex Computing Services Ltd (Company No ) was incorporated in 2006 and employs over 130 personnel. Operating across a UK network of parts locations, the company provides installation and maintenance services to retail and technology companies. Centrex occupy unit K1 as an engineering repair and filtration facility, in support of their information and control centre in Newcastle and further repair and distribution facilities in, Ashington and Belfast. For the year end December 2011 the company reported Net Assets 572,000 which increased from 406,668 at year end Further information on the company can be found on their website

6 Market Commentary Milton Keynes continues to benefit from strong occupier demand with 2012 witnessing significant activity in the take up of 15,000 70,000 sq ft units during the year, comprising 16 transactions and totalling approximately 496,000 sq ft. To date 2013 has seen a continuation of this trend, with 8 transactions having already completed totalling 290,000 sq ft, with a further 6 units currently under offer totalling over 220,000 sq ft. This has now led to tight supply with just 5 units remaining available between 30,000 and 70,000 sq ft and amounting to just 205,000 sq ft. Responding to market conditions prime rents have returned to a peak of 7.00 per sq ft for Grade A units, with enquiry levels remaining strong and coupled with increased competition for good quality buildings incentives are reducing and marketing periods have shortened. With limited design and build activity in 2012 or forecast in 2013, there are a number of sizeable enquiries focused on Milton Keynes, which should help increase further activity in Given the imbalance of supply and demand within this unit size range, we believe the property provides an excellent platform for rental growth given from the low passing rents.

7 VAT We understand that the property is elected for VAT. It is anticipated the the sale will be by way of a TOGC. Proposal We are seeking offers of 4,250,000 (Four Million, Two Hundred and Fifty Thousand Pounds), subject to contract, for the freehold interest, which reflects a net initial yield of 9.74% after allowing for purchaser s costs of 5.80% and a low gross capital value of gross capital value per sq ft. Contacts Lambert Smith Hampton United Kingdom House, Lambert Smith Hampton Interchange Place 180 Oxford Street, Edmund Street London W1D 1NN Birmingham B3 2TA Charlie Lake Adam Ramshaw clake@lsh.co.uk aramshaw@lsh.co.uk Stephen Parry-Jones sparryjones@lsh.co.uk Nick Lloyd nlloyd@lsh.co.uk Further information on the property can be obtained from: Subject to Contract and Exclusive of VAT Lambert Smith Hampton April 2013 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.

8 Energy performance certificates