FOR SALE PRIME INDUSTRIAL INVESTMENT UNIT 3 RUTHERFORD ROAD STEPHENSON INDUSTRIAL ESTATE WASHINGTON NE37 3HX

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1 FOR SALE UNIT 3 RUTHERFORD ROAD

2 INVESTMENT SUMMARY Strategically located on a prime industrial estate situated at the convergence of the A1(M), A194(M) and A1231. Modern detached unit extending to 69,105 ft². Expansion land of 0.6 hectares (1.5 acres). Large site with a low site coverage of 22%. Let on effectively full repairing and insuring leases to Tor Coatings and Pentair Technical Solutions UK Limited based on a weighted average unexpired lease term (WAULT) of 4.73 years to expiry. Very restricted supply of units of circa 50,000 ft² - 70,000 ft² in the region. Passing rent of 215,000 per annum which equates to 3.11 /ft² on an overall basis. Opportunity to extend the building and add value in future. Offers in excess of 2,400,000 (Two Million Four Hundred Thousand Pounds) are sought for our client s freehold interest reflecting a net initial yield of 8.42%, after the deduction of standard purchaser s costs of 6.36%. A purchase at this level would show a low capital value of /ft². 02

3 Inverness Aberdeen Perth M90 Dundee LOCATION Glasgow M8 M74 Edinburgh Washington is located 6 miles (10km) south of Newcastle, 5 miles (8km) west of Sunderland and 13 miles (21km) north of Durham. The town is ideally positioned to serve the main centres of Tyne & Wear and the North East region. Washington benefits from excellent road communications with the A1(M) passing to the west and the A19 trunk road to the east. There is a dual carriageway access to each of these major arterial routes. The Port of Tyne is situated 5 miles (8km) to the east and Newcastle International Airport 12 miles (19km) to the north west. Washington has been particularly successful in attracting a diverse range of occupiers and now totals circa 6 million ft² of industrial space and 750,000 ft² of office accommodation built over the past 25 years. The largest industrial occupier at Washington is Nissan whose factory complex is situated 1½ miles (2.4km) to the east. In 2013, Nissan extended their factory complex by a further 420,000 ft² in order to handle additional production. This has had a positive knockon effect on supply and demand. The major occupiers at Washington include NEK Berghaus, Bowater Scott, Ikeda Hoover, Rank Xerox, Vodafone, Gestamp and Volvo. Dublin Belfast Swansea Carlisle Liverpool Manchester Newcastle York Shrewsbury Norwich Birmingham Cardiff London Southampton Plymouth M6 A1(M) M62 WASHINGTON M1 M40 M1 M11 A1(M) M5 M4 M3 M25 M20 M23 Penzance 03

4 STRATEGICALLY LOCATED ON A PRIME INDUSTRIAL ESTATE SITUATION The Northumbria Centre The property is situated within Stephenson Industrial Estate which lies to the north of Washington Town Centre, within 1 mile of the A194(M) and 2 miles from the A1(M). A1 Longbenton A1058 A19 North Shields South Shields A195 STEPHENSON INDUSTRIAL ESTATE UNIT 3 RUTHERFORD ROAD The A194 is a short distance to the north of the estate, accessed via the A195, providing a quick link to the A1(M) to the west and the A19 to the east, both providing excellent transport links with the wider region and national road network. A167 Newcastle upon Tyne Wellsend Hebburn Jarrow A1300 A183 Sulgrave Industrial Estate Surrounding occupiers on Stephenson Industrial Estate include Precision Engineering, Simpson Group, SNOP and Gestamp. Metrocentre Whickham A692 Sunniside A184 Lamesley Gateshead A184 A194(M) A195 UNIT 3 Whitburn Cleadon East Boldon RUTHERFORD West Boldon ROAD A1018 A19 A1290 SULGRAVE A1290 Ouston Birtley A167 A1(M) WASHINGTON A1231 A183 Sunderland A1290 A195 Bental Business Park A

5 A19 NISSAN FACTORY VANTEC A1231 TO THE A1 (M) > GESTAMP SIMPSON GROUP SNOP UK LIMITED CHAINBRIDGE STEEL UNIT 3 RUTHERFORD ROAD PRECISION ENGINEERING 05

6 DESCRIPTION The property was constructed in 1996 and comprises a single storey production/warehouse unit of steel portal framed construction with an internal clear height of 5.5 metres. The external walls are of cavity brickwork and insulated profile steel cladding and the roof is double pitched and of insulated profile steel sheet construction incorporating translucent roof lights. The front two storey office block is let to Pentair Thermal Management UK Ltd who also have a compressor room and tank storage area in the service yard. Internally, the factory area has reinforced concrete floors throughout and is divided to provide a main production area and a smaller loading bay area with two electrically operated insulated sectional loading doors. At ground level the unit has male and female WCs with shower facilities and at mezzanine level there is open plan and private office accommodation. Externally, there is a tarmac service yard to the west of the building providing vehicular access to the 2 loading doors. There is car parking across the two units for circa 107 vehicles. EXPANSION LAND OF 0.6 HECTARES (1.5 ACRES) 06

7 ACCOMMODATION The property has been measured in accordance with the RICS Code of Measuring Practice (6th Edition) and has the following Gross Internal Area (GIA): Pentair m 2 ft 2 GF Offices/WCs 1,111 11,959 1F Offices/WCs 1,180 12,701 Compressor Room 133 1,432 Total 2,424 26,092 Tor Coatings m 2 ft 2 Factory Area 2,803 30,171 Loading Bay 598 6,437 WC Block Mezzanine Offices 514 5,533 Total 3,996 43,013 Grand Total 6,420 69,105 SITE The property sits on a total site of 2.22 ha (5.49 acres) and benefits from a low site coverage of 22%. MODERN DETACHED UNIT EXTENDING TO 69,105 FT 2 ² 07

8 OPPORTUNITY TO EXTEND THE BUILDING AND ADD VALUE IN FUTURE UNIT 3 RUTHERFORD ROAD TENURE Freehold. TENANCY The property is let in accordance with the below tenancy schedule: Tenant Pentair Technical Solutions UK Limited Tor Coatings Limited Lease Commencement Lease Expiry Rent (per annum) 29/11/ /11/ , /03/ /03/ , ,000 /ft² Comments Let on effectively full repairing and insuring terms with an outstanding rent review with effect from 28 November The lease is guaranteed by Tyco Thermal Controls (Canada) Limited (Company Number ). Let on effectively full repairing and insuring terms. Tenant break options with effect from 10 March 2018/2019 and Break penalties of 30,000 and 15,000 to apply if the tenant breaks in either 2018 or 2019 respectively. There is a right of access across Tor Coatings service yard to Pentair for access to the Compressor House and Gas Compound. Lease subject to a Schedule of Condition. There is a service charge which is fully recoverable across the building. The WAULT to expiry is 4.73 years and to the first break option of 2.85 years. 08

9 COVENANTS Pentair Technical Solutions UK Limited (Company Number ) Pentair, and their acquired businesses, has been established for more than 150 years. Pentair Thermal Management (former name of Pentair Technical Solutions) is a unique company which designs and integrates optimised heat management systems. The subject property is involved in the manufacturing and production of bespoke cabling for the nuclear power industry. Further information on the company can be seen at and Pentair Technical Solutions UK Limited has provided the following financial information: Company Pentair Technical Solutions UK Limited Year End Turnover ( ) Pre Tax Profit ( ) Shareholder s Funds ( ) 31/12/ ,085, ,000 12,614,000 31/12/ ,907,000 1,651,000 15,892,000 31/12/ ,487,000 3,465,000 14,703,000 Pentair has a Dun & Bradstreet score of 93 / 100 representing a very low probability of failure and has a rating of 3A1. The lease is guaranteed by Tyco Thermal Controls (Canada) Limited. In 2012, Tyco International sold Tyco Thermal Controls to Pentair plc. Renamed Pentair Thermal Management, this group continues to provide customers with the Raychem brand name for industrial, commercial and residential trace heating solutions. Pentair plc are a listed entity on the New York Stock Exchange (NYSE). Further information can be seen on their website VERY RESTRICTED SUPPLY OF UNITS OF CIRCA 50,000 FT 2-70,000 FT 2 IN THE REGION Tor Coatings Limited (Company Number ) Tor Coatings was established in 1975 and have over 35 years experience in the buildings coatings industry. A subsidiary of RPM International Inc., one of the world s largest coatings manufacturers, Tor Coatings is one of the UK s leading paint and specialist coatings manufacturers. As such, they are renowned for the professional partnership services it provides to the domestic and European paint and coatings industries. Tor have contracts in place with ICI, Johnstones Paints and Wickes. Further information on the company can be seen at Tor Coatings has provided the following financial information: Company Tor Coatings Limited Year End Turnover ( ) Pre Tax Profit ( ) Shareholder s Funds ( ) 31/05/ ,847,000 5,547,000 16,104,000 31/05/ ,499,000 4,380,000 11,801,000 31/05/ ,998,000 (8,073,000) 18,924,000 Tor Coatings has a Dun & Bradstreet score of 100/100 representing a minimum risk of business failure and have a rating of 4A1. 09

10 FOR SALE UNIT 3 RUTHERFORD ROAD VAT The property has been elected for VAT and therefore VAT will be payable on the purchase price. It is envisaged the sale will be dealt with by way of a TOGC. CONTACT For further information or to arrange an inspection please contact: EPC The property has an Energy Performance Certificate rating of C (73). A copy of the EPC and Recommendation Report can be provided on request. INVESTMENT PROPOSAL We have been instructed to seek offers in excess of 2,400,000 (Two Million Four Hundred Thousand Pounds) which reflects a net initial yield of 8.42%, based on purchaser s costs of 6.36%. A purchase at this level reflects a low capital value in the region of c /ft². Douglas Cranston MSc MRICS douglas.cranston@knightfrank.com Adam Greenwood MRICS adam.greenwood@knightfrank.com Dickon Wood MRICS dickon.wood@knightfrank.com Knight Frank LLP St Ann s Quay 124 Quayside Newcastle upon Tyne NE1 3BD MISREPRESENTATION ACT: Knight Frank LLP give notice to anyone who may read these particulars as follows:- 1. Particulars: These particulars are not an offer or contract, nor part of one. You should not rely on statements by Knight Frank LLP in the particulars or by word of mouth or in writing ( information ) as being factually accurate about the property, its condition or its value. Neither Knight Frank LLP nor any joint agent has any authority to make any representations about the property, and accordingly any information given is entirely without responsibility on the part of the agents, seller(s) or lessor(s). 2. Photos etc: The photographs show only certain parts of the property as they appeared at the time they were taken. Areas, measurements and distances given are approximate only. 3. Regulations etc: Any reference to alterations to, or use of, any part of the property does not mean that any necessary planning, building regulations or other consent has been obtained. A buyer or lessee must find out by inspection or in other ways that these matters have been properly dealt with and that all information is correct. 4. VAT: The VAT position relating to the property may change without notice. Knight Frank LLP is a limited liability partnership registered in England with registered number OC Our registered office is 55 Baker Street, London W1U 8AN, where you may look at a list of members names. May 2016.