singerviellesales.com Royal Bank of Scotland Plc, 5-9 St Nicholas Street, Worcester WR1 1UR
Investment Summary Cathedral City investment opportunity let to The Royal Bank of Scotland Plc 12.5 years unexpired lease term Fixed rental increase in 2021 Freehold Immediate opportunities to enhance value No VAT 7.0% net initial yield 8.95% potential reversionary yield Location The historic Cathedral City of Worcester is the administrative centre for the County of Worcestershire. Worcester is located approximately 206 km (129 miles) north west of London, 46.5 km (29 miles) south west Birmingham, 45 km (28 miles) north of Cheltenham and 43 km (27 miles) west of Stratford upon Avon. The city benefits from excellent road communications, being situated approximately 5 km (3 miles) to the west of Junctions 6 and 7 of the M5 Motorway which in turn links with the M2, M6 and wider UK network. Worcester is serviced by a mainline railway station, Worcester Foregate Street, with a fastest journey time of 2 hours 25 minutes to London Euston. There are also regular services to local destinations with the quickest journey time to Birmingham New Street of 43 minutes.
Situation The property comprises the only branch of the Royal Bank of Scotland in Worcester City Centre and is situated in a good retailing position just off The Cross on the edge of the prime retailing area in the City Centre. The property is in close proximity to Worcester Foregate Street Station and St Nicholas Street forms part of the inner ring road and links Foregate Street with City Walls Road. The prime retail location of the High Street is approximately 500 metres to the South. Retailers on The Cross include, McDonalds, Subway, Lloyds Bank, Costa Coffee and Nat West. St Nicolas Street forms part of the inner ring road and links Foregate Street with City Walls Road where the development of St Martins Quarter is situated. The scheme is anchored by an Asda Supermarket with other national retailers represented including Sports Direct, B&M Bargains and Ladbrokes. Worcester provides a pleasant city centre environment with a mix of retail accommodation, including High Street shops, covered shopping centres and a number of small arcades, as well as traditional narrow streets providing a focus for specialty and upmarket independent retailers. The prime retailing pitch is focussed on the pedestrianised High Street, together with three shopping centres being Crowngate, Cathedral Plaza and Reindeer Court. The recognised shopping areas extend into Broad Street, The Shambles and Pump Street, all of which are pedestrianised. Major retailers with representation in the City centre include Debenhams, House of Fraser, Marks & Spencer, Primark, TK Maxx, Burtons, H&M, Next, Argos, Waterstones, WH Smith and Jack Wills, River Island, Russell & Bromley, Topshop / Topman as well as a number of independent and boutique retailers. Worcester University is one of the fastest growing in Britain. In May 2015 the university won the Guardian University Award for Buildings that Inspire through its development of the University of Worcester Arena, a state-of-the-art sport facility designed to accommodate both disabled and able bodied athletes.
Description The property is arranged over basement, ground and two upper floors having a prominent frontage to St Nicholas Street of 21.24 meters (69 feet). The property is constructed of a blend of concrete and brick beneath a flat roof. The ground floor has a recessed glazed retail display frontage and the upper floors have single glazed metal framed windows The ground floor unit is accessed through automatic double doors leading to the customer area which is fitted out in the tenant s corporate corporate image. There are three customer meeting rooms which have been separated with glazed partitioning and the cashier s area is fully secure behind security glass. There is a secure area which houses the ATM machine next to the main entrance. To the rear of the ground floor there are male and female WC facilities and a small storage room. The basement provides ancillary storage, the main vault and a staff room with a kitchenette and a WC. The first floor offices are ancillary to the bank branch and are fitted out to a specification including carpeted floors, painted walls, suspended ceiling with recessed fluorescent strip lighting and electric storage heaters around the perimeter. The second floor which is self-contained having its own entrance at the left hand side of the property at street level is fitted out to a similar specification with partitioned rooms.
Accommodation We have been advised the property provides the following net internal floor areas; Ground Floor Retail 175.35 sq m 1,887 sq ft ITZA 138.66 sq m 1,493 sq ft First Floor Offices 162.57 sq m 1,750 sq ft Second Floor Offices 212.62 sq m 2,289 sq ft Basement Ancillary 137.70 sq m 1,482 sq ft Total Net Internal Area 688.24 sq m 7,408 sq ft Planning We understand the current use for the property falls within Class A2 and B1 of the Town and Country Planning (Use Classes) Order 1987 (as amended). Also, the property is not listed and it is not in a Conservation Area. Rateable Value Tenancy The basement and ground floor of the property are let to The Royal Bank of Scotland Plc on effectively full repairing and insuring terms from 13th December 2006 expiring on 31st December 2027 at a current passing rent of 55,423 per annum. Therefore, there are 12.5 years unexpired lease term with no breaks. The lease benefits from 5 yearly upward only rent reviews. The 2016 rent review has already been fixed at the current passing rent in return for the removal of a break clause. The next rent review on 13th December 2021 benefits from a fixed rental increase of 3.75% hence the rent is guaranteed to increase to 57,501 per annum. The first floor is also occupied by The Royal Bank of Scotland Plc although they have been holding over since their lease expired on 31st December 2008. They have and continue to pay a rent of 11,661 per annum ( 71.73 per sq m / 6.66 per sq ft). The second floor has recently become vacant. Therefore, the total current income receivable is 67,084 per annum of which 83% is long term income to The Royal Bank of Scotland Plc. Our enquiries indicate that the Rateable Value for the property is as follows; Bank and Premises 55,000 2 nd Floor 11,250 The uniform business rate is 49.3 pence per pound for 2015/2016. Tenure Freehold.
Covenant The tenant, The Royal Bank of Scotland Plc, has reported the following figures; Revenue Operating Income Net Income Total Assets Total Equity 31 st December 2014 15,150 billion 2,643 billion 0.734 billion 1,051 billion 60,200 billion The Royal Bank of Scotland Group Plc is a British banking and insurance holding company providing personal and business banking, private banking, insurance and corporate finance on a global scale. In the United Kingdom and Ireland its main brands are The Royal Bank of Scotland, Nat West Bank and Coutts. In a recent announcement by the Chancellor of the Exchequer the United Kingdom government will begin the process of selling its 81% stake in the group, with the support of the Bank of England, which is seen as a clear sign the county has moved on from the financial crisis of 2008 and is firmly on the road to economic recovery. The government s holding is reportedly worth 32 billion. The group is a member of the FTSE100 being listed on both the London and New York Stock Exchange. For further information please visit www.rbs.com.
Rental Commentary We understand prime retail rents in Worcester are currently in the region of 140 Zone A as evidenced by two recent lettings at both 45 High Street and 46 High Street to Fraser Hart and Swarovski respectively. In secondary positions retail rents range from 35 Zone A to 70 Zone A. We understand there are two retails currently under offer on The Cross; No.30 is under offer at 30,000 per annum equating to 43.50 Zone A and No. 24/25 is under offer at 50,000 per annum equating to 43 Zone A. No. 14 Foregate Street which is considered to be an inferior location to the subject property was let in October 2014 on a 12 year lease at 31.30 Zone A. The current passing rent at a t the subject property reflects 35 Zone A on the ground floor applying 3.00 per sq ft to the basement area. Recent office lettings in the city centre have included Britannia Court, 19 Britannia Road where a suite of 1,590 sq ft was let in November 2014 on a short term agreement at 10.05 per sq ft. 28 Foregate Street which comprises a listed office building and a ground floor suite of 1,220 sq ft was let in November 2014 on a 5 year lease with a 2 year break option at a rent equating to 9.84 per sq ft. Marrion House, 1-3 Copenhagen Street comprises a 1960 s property providing ground floor retail accommodation with offices above hence similar to the subject property. A suite of 538 sq ft was let in October 2014 followed by a suite of 1,120 sq ft let in November 2014 equating to 7.50 per sq ft and 6.50 per sq ft respectively. The current passing rent of the first floor equates to 71.73 per sq m ( 6.66 per sq ft). The second floor was let until recently at 16,608 per annum equating to 78.11 per sq m ( 7.25 per sq ft). Our enquiries indicate the subject office accommodation has an estimated rental value in the region of 80 per sq m ( 7.50 per sq ft) which would equate to 13,125 per annum on the first floor and 17,167.50 per annum on the second floor. Therefore, it is our opinion that the total estimated rental value for the property is 85,715.50 per annum. Value Added Tax The property has not been elected for VAT. Therefore, VAT will not be payable.
Investment Considerations 1. An opportunity to acquire a freehold retail and office investment in an historic Cathedral City; 2. The investment provides secure income let to The Royal Bank of Scotland Plc for a further 12.5 years with a fixed rental increase in 2021; Proposal Our client is seeking offers in the region of 90 905,000 (Nine Hundred and Five Thousand Pounds), subject to contract, reflecting a net initial yield of 7.0% and a potential reversionary yield of 8.95%. 3. The upper parts provide an investor with an opportunity to add value by regularising the lease on the first floor and letting the vacant accommodation on the second floor increasing the rental income; 4. Alternatively, a purchaser could seek a change of use subject to t the usual consents; 5. A purchase at the asking price reflects an attractive net initial yield reflecting 7.0% and a potential reversionary yield of 8.95%. Singer Vielle Vendors Solicitor 94-96 Wigmore Street DAC Beachcroft London W1U 3RF 100 Fetter Lane Tel: +44 (0) 207 935 7200 London EC4A 1BN Neil Singer neil@singervielle.co.uk Tel: +44 (0) 207 894 6682 Dale Henry dale@singervielle.co.uk Sakis Tombolis stombolis@dacbeachcroft.com Richard Wolfryd richard@singervielle.co.uk SUBJECT TO CONTRACT & EXCLUSIVE OF VAT Misrepresentation Act 1967 Singer Vielle for themselves and for the Vendors or Lessors of this property whose Agents they are give notice that: 1. The particulars are set out as a general outline only for the guidance of intending purchasers or lessees, and do not constitute, nor constitute part of, an offer or contract 2. All descriptions, dimensions, references to condition and necessary permissions for use and occupation, and other details are given in good faith and are believed to be correct but any intending purchasers or tenants should not rely on them as statements or representations of fact but must satisfy themselves by inspection or otherwise as to the correctness of each of them. 3. No person in the employment of Singer Vielle has any authority to make or give any representation or warranty whatever in relation to this property. 4. All maps are for identification purposes only and should not be relied upon for accuracy. 5. Unless otherwise stated, all prices and rentals quoted are exclusive of Value Added Tax to which they may be subject. Finance Act 1989 Unless otherwise stated, all prices and rents are quoted exclusive of VAT. Property Misdescriptions Act 1991 These details are believed to be correct at the time of compilation, but may be subject to subsequent amendment. Concerning the Properties listed and/or appearing on the Site: 1. Under no circumstances shall we be liable to you for any direct, indirect, consequential, incidental or special damages arising out of your purchase or lease of any Properties on the Site. 2. Under no circumstances shall we be liable for any errors or incompleteness of the information relating to any Property listed on this Site or if any Property has been withdrawn from sale or lease nor shall we be responsible for any inaccurate dimensions of any Properties or price listed. 3. Our website service permits you to enquire about and to purchase or lease Properties appearing on or listed on this Site. Such enquiries, purchase or leasing can only be made and permitted strictly subject to the terms and conditions set out below. 4. We do not accept responsibility or liability for the completeness or accuracy of information appearing on this Site which is provided by the Vendors or Lessors of the Property concerned who are solely responsible for such information. 5. Whilst we believe that the Properties listed are available for purchase or lease we make no guarantee that this is the case or that they have not been withdrawn by the Vendor or Lessor of the same. All Properties appearing or listed on the Site are subject to changes, errors or omissions. We have not verified the accuracy of the information relating to the Properties or any dimensions which have been given by the Vendors or Lessors. 6. All Properties are listed subject to contract and the prices shown are exclusive of VAT if applicable.