Retail, Office & Healthcare Investment 62-64 Long Row & 77/ 77A Upper Parliament Street, Nottingham NG1 6JE
INVESTMENT SUMMARY n Large mixed use building in central Nottingham with frontages onto both Long Row and Upper Parliament Street n Retail unit let to Tesco until February 2023 with uncapped RPI rent reviews n Upper floors predominantly occupied as an NHS health centre and let for further 7.75 years (tenant option to break in July 2018) n Vacant retail unit on Upper Parliament Street n Current combined rent - 569,197 per annum n 3,950,000 n Initial Yield 13.62% LOCATION The city of Nottingham is located in the heart of the East Midlands, approximately 27 miles north of Leicester and 16 miles east of Derby. The city centre lies east of the M1 motorway and Junctions 24, 25 and 26. Nottingham has a primary catchment population of 1,033,000 and is home to major companies including Alliance Boots, Experian, Paul Smith, Capital One, Raleigh and Speedo. The city is home to two of the UK s leading universities, the University of Nottingham and Nottingham Trent University, which are attended by approximately 55,000 students. Rail services to Nottingham include direct links to London St Pancras which have a journey time of around 1 hour 45 minutes. There are also regular services to Birmingham, Derby and Manchester. The city benefits from the Nottingham Express Transit tram system (NET), one of the UK s most successful rapid transport systems. Line One connects the city centre with suburbs to the north as far out as Hucknall and south to the main railway station. There is a 500m southern extension soon to be in operation which will extend the line to the south east towards Beeston, Chilwell and Clifton. East Midlands Airport is located 12 miles to the south west of the city. The 24 hour Skylink bus service connects the airport to the city centre and rail services are provided to the nearby East Midlands Parkway, with a fastest journey time of 10 minutes. A610 DERBY ROAD STANDARD HILL A6005 NOTTINGHAM TRENT UNIVERSITY WOLLATON THE AXIS A6008 CHAPEL QUARTER A6008 MAID MARIAN WAY NOTTINGHAM CASTLE THEATRE ROYAL STH. SHERWOOD KAPLAN STUDENT RESIDENCES UPPER PARLIAMENT MARKET FRIAR LANE WILFORD LONG WHEELER GATE A60 MILTON THE CORNERHOUSE KING ROW WEST OLD MARKET SQUARE GATE LISTER CLUMBER VICTORIA BROADMARSH CENTRE VICTORIA CENTRE COLLIN CANAL GLASSHOUSE LOWER A60 PARLIAMENT LACE MARKET CRANBROOK S NOTTINGHAM RAILWAY STATION BELWARD BELLAR GATE A6008 LONDON ROAD PARLIAMENT
RETAILING IN NOTTINGHAM Nottingham is one of the UK s principal retailing centres and shopping destinations. The city has an estimated shopping population of approximately 590,000, ranking it 7th out of all the UK PROMIS centres. The shopping population is forecasted to experience a 7.6% increase over the ten year period from 2008. Nottingham is the dominant retail location within the East Midlands and captures a large volume of the available spend within the region. The city s extensive retail provision is estimated at 2.88 million sq ft, ranking the city 4th out of the 200 PROMIS centres. SITUATION The property has a dual frontage to both Long Row and Upper Parliament Street and is located just off Market Square and Maid Marian Way. The subject property is opposite Chapel Quarter, a modern landmark mixed use development. The pedestrianised Chapel Bar provides outdoor dining areas for bars and restaurants. Market Square is home to the Town Hall and NET transport connections. Nearby retailers include Debenhams, McDonalds, Caffe Nero, Corals, William Hill and Lloyds Bank. Leisure occupiers include Ask, Las Iguanas and Fat Cat Cafe. A Holiday Inn Express forms part of Chapel Quarter. Behind Long Row Kaplan has recently built a new 450 bed facility for international students adjacent to Chapel Bar. INDICATIVE FLOOR LAYOUT PLANS The northern facing frontage of the property is on Upper Parliament Street and lies opposite The Axis, a 2009 mixed use scheme developed by Henry Boot. Occupiers include the Ramada Hotel and Alea Casino. Both Long Row and Upper Parliament Street are key bus destinations for central Nottingham. GROUND FLOOR PLAN FIRST FLOOR PLAN DESCRIPTION 62-64 Long Row The Tesco store provides a large ground floor retail unit with direct frontage to Long Row. The shop has rear stores. Behind the Tesco unit is a separate store area which is currently vacant and is served by one of the internal lifts from the upper floors. There is also a separate office entrance to the side of the Tesco store providing an entrance lobby & access to the upper floors. Shared Access Area Vacant Stores Tesco Vacant Retail Unit General Healthcare Sublet NEMS Sublet Framework SECOND FLOOR PLAN UPPER PARLIAMENT Access To Apartments
77 Upper Parliament Street The property was substantially redeveloped/refurbished in 2006 and the two main upper floors were converted into a health centre. The accommodation has two access points, one entrance is on Long Row while the current main entrance is from Upper Parliament Street on the second floor at street level. The design and layout does mean the accommodation can be split and separately occupied in the future. The accommodation has been divided into public areas and consultation rooms. The majority of the second floor is currently used as an NHS surgery. The first floor is currently vacant. 77A Upper Parliament Street This is a small lock up shop currently in shell condition with a shop front. The shop is currently vacant. Residential apartments are located above 77 Upper Parliament Street with direct access from the street. These have been sold off long leasehold. SCHEDULE OF ACCOMMODATION AND TENANCIES The property is let to two main tenants, Tesco and General Healthcare Mixer Partnership LLP. The WAULT to expiry is 7.67 years and to break 3.60 years. The current combined income is 569,197 per annum. 77A Upper Parliament Street and the additional ground floor stores are currently vacant. A summary of the tenancies and floor areas is below. UPPER PARLIAMENT UNIT TENANT FLOOR AREA (SQ.FT) LEASE START The majority of the second floor is currently sub let to NEMS Healthcare Ltd with a lease expiry of 11 July 2023, subject to the break in the head lease in 2018. They are currently paying 126,438 per annum. The remaining upper floor space is sub let to Framework Housing Association on a 5 year term from 06/02/2013 with a tenant break at Year 3. They are currently paying 20,000 per annum. The sub tenant has recently delayed their break option to 05/02/2017. LEASE EXPIRY (BREAK) RENT COMMENTS EPC 62-64 Long Row Tesco Stores Ltd 5,908 08/02/2008 07/02/2023 105,320 5 yearly rent reviews to open RPI C-56 62-64 Long Row Stores Vacant 2,500 77 Upper Parliament Street First & Second Floors General Healthcare Mixer Partnership LLP 21,550 20/06/2012 15/07/2023 (15/07/2018) 463,877 Tenant break requires 6-12 months notice. Stepped rental increase due from 16/07/2018 to 524,834 77A Upper Parliament Street Vacant 743 (15/07/2018) D-100 77A Upper Parliament Street Parliament House Ltd 24/06/2009 23/06/2134 0 Residential sold off on long leasehold TOTAL 30,701 569,197 C-55 C-52
TENURE Freehold. COVENANTS Tesco Stores Ltd - Tesco is one of the world s largest grocers and the biggest in the UK with a market share of approximately 28%. The company is an undoubted covenant and has a D&B rating of 5A1. The Long Row store is reportedly the busiest store in the whole of the central Nottingham group. 01/02/2014 01/02/2013 01/02/2012 Turnover 43,547,000 42,662,000 41,981,000 Pre-tax Profit 1,696,000 921,000 2,126,000 Net Assets 3,038,000 3,113,000 6,894,000 General Healthcare Mixer Partnership LLP - An investment holding partnership incorporated in May 2006 which through its subsidiaries carries out business as a private group operating hospitals and providing an extensive range of general and specialised medical care services. 30/09/2013 30/09/2012 30/09/2011 Group Revenue 847,800 878,500 887,600 OLD MARKET SQUARE Group Profit from Continuing Operations 104,300 106,600 112,600 Net Assets 292,231 (409,720) 338,830 NEMS Healthcare Ltd - The company holds contracts to deliver NHS services on behalf of their commissioners, NHS Nottingham City and NHS Nottinghamshire South Clinical Commissioning Group. NEMS provide a walk in service which serves almost 40,000 visits per year. Registered patient numbers since 2010 at the outset have risen from zero to 8,000 and continue to grow. The GP practice has achieved the highest patient satisfaction rating for any Nottingham GP practice for the last three years. PLANNING We understand the Long Row and Upper Parliament Street retail units have A1 consent while the upper floors have D1, B1 and A3 use. PROPOSAL We are instructed to seek offers in excess of 3,950,000. A purchase at this level would show an initial yield of 13.62% after allowing for purchaser s costs of 5.8%. VAT VAT will be applicable on the purchase. It is intended that the purchase would be treated as a TOGC. EPC s EPC certificates are available on request. The individual ratings are set out in the tenancy schedule. CONTACTS For further information or if you wish to arrange a viewing, please contact :- ANDREW PRICE 0121 513 0892 andrew.price@fspproperty.co.uk Franck Steier Price Ltd Third Floor, Victoria House ANDREW FRANCK-STEIER 0121 513 0891 andrew.franck-steier@fspproperty.co.uk 114-116 Colmore Row, Birmingham, B3 3BD Misrepresentation Clause : The accuracy of any description, dimensions, references to condition, necessary permissions for use and occupation and other details contained herein are not guaranteed and are for general guidance only and prospective purchasers or tenants must not rely on them as statements of fact or representations and must satisfy themselves of their accuracy. Neither Franck-Steier Price Ltd, nor any of their employees or representatives has any authority to make or give any representation or warranty or enter into any contract whatever in relation to the property. Prices and rents quoted in these particulars may be subject to VAT in addition. The reference to any mechanical or electrical equipment or other facilities at the property shall not constitute a representation (unless otherwise stated) as to its state or condition or that it is capable of fulfilling its intended function. Prospective tenants/purchasers should satisfy themselves as to the condition of such equipment for their requirements.