MOTORWAY INDUSTRIAL ESTATE STEVENAGE BABBAGE ROAD SG1 2EQ HIGHLY REVERSIONARY SOUTH EAST MULTI-LET INDUSTRIAL ESTATE

Transcription

1 BABBAGE ROAD SG1 2EQ HIGHLY REVERSIONARY SOUTH EAST MULTI-LET INDUSTRIAL ESTATE

2 WE ARE INSTRUCTED TO SEEK OFFERS IN EXCESS OF 6,430,000 (SIX MILLION FOUR HUNDRED AND THIRTY THOUSAND POUNDS), SUBJECT TO CONTRACT, FOR THE FREEHOLD INTEREST. A PURCHASE AT THIS LEVEL REFLECTS A NET INITIAL YIELD OF 6.00%, AN ANTICIPATED REVERSIONARY YIELD OF 7.53% AND A LOW CAPITAL VALUE OF 106 PER SQ FT, SUBJECT TO PURCHASER S COSTS OF 6.64%. Highly reversionary South East multi-let industrial estate. Located to the west of Stevenage Town Centre, benefiting from excellent access to Junctions 7 and 8 of the A1 (M). The estate extends to 60,808 sq ft (GIA) and comprises 6 units ranging from 6,231 sq ft to 18,942 sq ft; each benefiting from secure yards. The site extends to approximately 2.92 acres (1.18 ha), which reflect a site cover of 47%. Freehold. The property is fully let to 5 tenants, with an AWULT of approximately 7.74 years to expiry and 5.45 years to break. Total rental income of 411,488 per annum, equating to a low overall passing rent of 6.77 per sq ft. Recent transactions on-site demonstrate the estate has significant reversionary potential with rents now reaching 8.50 per sq ft.

3 15 A A1(M) J7 Stevenage MOTORWAY INDUSTRIAL ESTATE Gunnels Wood Road A1(M) 1 Hyatt Trading Estate 2 Alchemy Metals 3 John Lewis Partnership 4 Flamingo Producers 5 SG1 Industrial Estate 6 Fujitsu 7 AVC Group 8 DSG Retail 9 Mercedes-Benz 10 Airbus Defence & Space 11 Argyle Trading Estate 12 Stevenage Leisure Park 13 Caxton Way Industrial Area 14 io Centre 15 Gunnels Wood Park

4 4 LOCATION SITUATION CONNECTIVITY Stevenage is located in the County of Hertfordshire approximately 31 miles north of London, 15 miles east of Luton and 9 miles north of Welwyn Garden City. Stevenage has an urban area population of 84,000 persons (2011 census), and the town is a substantial commercial centre with a significant industrial and office employment base. Major service sector employers located in Stevenage include GlaxoSmithKline, Fujitsu, Du Pont and Kwik Fit. The property is situated to the west of Stevenage Town Centre and sits equidistant between Junction 7 and 8 of the A1 (M) providing easy access to Central London and the North of England. The property is located in a prime position in the Gunnels Wood area. It is accessed from Cavendish Road off of Gunnels Wood Road, behind the main commercial area and bordering the A1 (M). Other local occupiers include Kwik Fit, Mercedes-Benz, Safestore, DSG, Fujitsu and John Lewis. Road The town benefits from excellent road communications being served by Junctions 7 and 8 of the A1 (M). Junction 23 of the M25 is approximately 15 miles to the south. The provides links with Hertford and Hitchin and via the A505 with Luton. A1 J9 11 A6 J10a J10 Hitchin Luton Letchworth J8 J7 J10 J9 A1(M) A1(M) A505 Stevenage A1155 Royston A10 A10 A120 Bishops Stortford J8 Stansted NORTH Gunnels Wood Rd Cavendish Rd Babbage Rd Fairview Rd A1155 Stevenage A1155 Sish Ln Town Centre St. Georges Way A1155 Cuttys Ln Rail Stevenage is the first stop on the east coast main line rail route from London Kings Cross to Edinburgh. The fastest journey time to London Kings Cross is approximately 20 minutes. 5 J9 M1 J8 J7 J6/J21 M10 J1 Watford St Albans Harrow Welwyn Garden City M25 J3 J23 Hatfield A41 A406 A1 A414 Enfield A10 Cheshunt A10 J25 London Ware Harlow Epping J7 M11 J6/J27 M11 A12 Romford A1(M) Norton Green Gunnels Wood Rd Knebworth Country Park Six Hills Way A1072 A1(M) J7 London Rd LONDON Monkswood Way Air International airport facilities are provided at Luton Airport, which is approximately 15 miles to the west via the A505. Stansted Airport is located approximately 30 miles east via the and A120. Heathrow Airport is also located 40 miles south.

5 5 DESCRIPTION SITE The estate comprises six units totalling 60,808 sq ft across two terraces fronting Babbage Road; one of four units and the other of two units. The property provides principally clear storage/ production space with both ground and first floor offices and each unit benefits from secure yard and selfcontained parking areas. The site area totals approximately 2.92 acres (1.18 hectares), providing a site cover of 47%. TENURE Freehold. The units are of varying sizes and provide the following specification: A mix of brick and steel clad elevations under pitched steel profiled roofs. c.10% translucent roof lights. Three phase power and lighting. Minimum of 6m clear eaves height. Warm air blow heaters in warehouse. A mix of concertina and roller shutter doors. Secure fenced yards.

6 6 TENANCIES The estate is fully let to five tenants on six separate leases. The property benefits from a weighted average unexpired lease term of 7.74 years to lease expiries and 5.45 years to lease break options. The property produces a total rent of 411,488 per annum which reflects a low average rent of 6.77 per sq ft. The estate is now highly revisionary with passing rents ranging between 5.48 per sq ft and 8.50 per sq ft. Unit Tenant Sq M Sq Ft Start Date Expiry Date Break Clause Next Review Date Rent per annum Rent psf Comments 1 CCF 595 6, Feb Feb Feb Feb-20 35, Guarantor: Travis Perkins (Properties). Tenant pays rent monthly. Schedule of Condition. Inside the Act. 2 Hire Station 579 6, May May-21 n/a 52, psf recently agreed at May 2016 Rent Review. Schedule of Condition. Inside the Act. 3 Coster Aerosols 1,176 12, May May-20 n/a 72, Inside the Act. 4 East of England Ambulance Service NHS Trust 1,760 18, Oct Oct Oct Oct , months rent free from 03/10/2016 to 02/04/2017. Vendor to Top-up to this level. Schedule of Condition. Inside the Act. 5a Coster Aerosols 769 8, Sep Sep-18 n/a 47, Inside the Act. 5b Kitchen Appliance Installation 770 8, Oct Oct Oct Oct-21 70, Reversionary lease agreed but not yet documented for a term of 5 years from 24/10/2018 to 23/10/2023 with a break and Rent Review on 24/10/2021 at a passing rent of 70,465 a with 3 months rent free. Vendor to Top-up to this level. Inside the Act. 5,649 60, , The current service charge budget for the year ending 31st December 2017 is 27,120, which equates to 0.45 per sq ft.

7 7 COVENANT The estate benefits from a diverse tenant mix with 82% of the passing income secured to tenants with a FAME Credit Score rating above 95/100 Secure, representing a Minimal risk of business failure. CCF (Company Number ) Hire Station (Company Number ) CCF is one of the UK s leading distributors of interior building products to professionals within the construction industry. Its competitively-priced product range includes ceilings, drywall, flooring, insulation, partitioning and fire protection, all of which are supplied from stock and delivered nationwide from over 40 branches. The business is wholly owned by Travis Perkins Ltd, CCF achieves a 95/100 FAME Credit Score, reflecting a Minimal risk of business failure, and has produced the following accounts for the last three years. 31/12/ /12/ /12/2013 Turnover 369,380, ,331, ,853,000 Profit Before Taxation 19,206,000 15,248,000 10,096,000 Net Tangible Assets 104,777, ,561,000 96,264,000 Hire Station is one of the UK s leading dedicated tool hire businesses, with a focus on rapid supply of plant, tools and lifting equipment and operating from 56 nationwide branches. The business is wholly owned by VP Plc, who is listed within the London Stock Exchange. Hire Station achieves a 99/100 FAME Credit Score, reflecting a Minimal risk of business failure, and has produced the following accounts for the last three years. 31/03/ /03/ /03/2014 Turnover 84,149,000 78,146,000 66,584,000 Profit Before Taxation 10,383,000 8,191,000 4,223,000 Net Tangible Assets 50,206,000 42,928,000 38,923,000 East of England Ambulance Service NHS Trust Coster Aerosols (Company Number ) Coster Aerosols are a leading manufacturer of aerosol spray and dispensing packaging components and filling machines. The UK entity is a subsidiary of a larger international business, Coster Group, which recorded a turnover of over 189M EUR in The two units within the estate are a core element of the UK operation and work closely with their second UK unit in Barlborough, Derbyshire. Coster Aerosols achieves a 95/100 FAME Credit Score, reflecting a Minimal risk of business failure, and has produced the following accounts for the last three years. 31/12/ /12/ /12/2013 Turnover 16,275,000 16,223,000 18,390,000 Profit Before Taxation 155,000 56, ,000 Net Tangible Assets 9,365,000 9,768,000 7,013,000 The East of England Ambulance Service NHS Trust provide 24 hour, 365 days a year accident and emergency services and patient transport services to the residents of Bedfordshire, Hertfordshire, Essex, Norfolk, Suffolk and Cambridgeshire. In 2015/16, the trust s total income was in excess of 133 million for services provided. The subject property is currently being fitted out to be used as an operations centre and vehicle maintenance depot. Kitchen Appliance Installation (Company Number ) Kitchen Appliance Installation is a regional supplier for kitchen appliances with the subject unit being the sole operation location of the business. 31/03/ /03/ /03/2013 Net Tangible Assets 226, ,802 17,061

8 8 MARKET COMMENTARY Stevenage is a well-established town with Gunnels Wood forming a major industrial centre within Hertfordshire. In 2015 occupational demand across the town has risen significantly with 575,000 sq ft of industrial floor space taken up, representing the strongest level of annual take up in the last five years. Over the past five years 818,000 sq ft of industrial floor space was taken up in Stevenage. Motorway Industrial Estate and the surrounding Babbage Road area provide good quality industrial accommodation and is considered as one of the premier industrial locations within the town. This strong micro location coupled with a lack of supply has resulted in sustained demand and rental growth. This is illustrated by the recent deals on the estate, where transactions in Unit 2 and 6 at 8.50 per sq ft have set an improved headline rent. This level is further supported by SG1, a 80,000 sq ft estate of 6 units located off Gunnels Wood Road, where rents achieved 8.00 per sq ft in 2014 and are expected to achieve in excess of 8.50 per sq ft shortly. Hyatt Trading Estate has also already achieved 8.40 per sq ft on units below 5,000 sq ft, with quoting rents now at 9.00 per sq ft. INVESTMENT MARKET Given the strong occupational fundamentals in the South East, the multi-let industrial estate investment market has seen a renewed interest since the Brexit referendum in June 2016 with numerous examples of competitive bidding. In Q4 2016, a number of prime assets within London have traded at Net Initial Yields of sub-5% and this has caused a visible ripple on pricing to the wider South East market. Recent investment transactions are shown below: These new headline levels still provide an attractive discount to other nearby centres such as Hatfield and Welwyn Garden City, where rents in excess of 9.00 per sq ft are being achieved. Date Address Size (Sq Ft) AWULT Rent Status Achieved Price NIY Cap Val Per Sq Ft Purchaser Jan-17 Dunhams Court, Letchworth 72, ,772 Sold c. 6,700,000 c.6.00% Private Jan-17 Reading Approach, Reading 81, ,038 Sold 13,220, % Local Authority Dec-16 Trackside Business Centre, Byfleet 63, ,814 Sold 9,400, % Standard Life Nov-16 Headley Industrial Estate, Reading 114, ,594 Under Offer c. 16,635,000 c.5.30% UK Fund Nov-16 Bar Hill Trading Estate, Cambridge 158, ,880 Under Offer 11,380, % UK Fund Aug-16 Lawrence Way, Camberley 87, ,000 Sold 11,100, % DTZ Investors Aug-16 Royce Road Industrial Park, Crawley 72, ,938 Sold 11,600, % Eyre Estates Jan-16 Manfield Park Industrial Estate, Cranleigh 55, ,681 Sold 7,300, % Private

9 EPC VAT CONTACTS Energy Performance Certificates are available on request. The property has been elected for VAT and therefore it is envisaged that the sale will be treated as a Transfer of a Going Concern (TOGC). NICK LLOYD nlloyd@lsh.co.uk MILES CHUTER mchuter@lsh.co.uk PROPOSAL WE ARE INSTRUCTED TO SEEK OFFERS IN EXCESS OF 6,430,000 (SIX MILLION FOUR HUNDRED AND THIRTY THOUSAND POUNDS), SUBJECT TO CONTRACT, FOR THE FREEHOLD INTEREST. A PURCHASE AT THIS LEVEL REFLECTS A NET INITIAL YIELD OF 6.00%, AN ANTICIPATED REVERSIONARY YIELD OF 7.53% AND A LOW CAPITAL VALUE OF 106 PER SQ FT, SUBJECT TO PURCHASER S COSTS OF 6.64%. PHILIP COLMAN pcolman@lsh.co.uk Disclaimer: Lambert Smith Hampton Group 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. January 2017