INVESTMENT SUMMARY Modern industrial estate comprising five units constructed in 1997. Improving location which will benefit from continued public sector investment as well as a new film production studio development. Multi-let to a range of national and international covenants including Coors Brewers Limited and International Plastics Systems Limited. The passing rent of 248,000 per annum is reversionary to 269,375 per annum. The estate benefits from a number of asset management initiatives including rent reviews, lease renewals, tenant relocations and unit extensions. Our client is seeking offers in excess of 2,925,000 (Two Million Nine Hundred & Twenty Five Thousand Pounds) which reflects an initial yield of 8.00%, an equivalent yield of 8.50% and a reversionary yield of 8.71%. THE PROPERTY SEAHAM A1018 A1018 A1018 HALL DENE WAY B1404 SEATON LANE B1404 SEATON LANE LOCATION Seaham is located in East County Durham, approximately 25 miles north of Middlesbrough, 15 miles south of Newcastle and 12 miles east of Durham. The town benefits from strong road communications being situated close to the, providing access to all of the m conurbations in the North East Newcastle, Sunderland, Durham, Middlesbrough and Stockton-on-Tees. The A1(M) is located 6 miles to the east, connecting the North East to London. Train services from Seaham to London (Kings Cross) are via Newcastle with the fastest journey time of a little over four hours. Newcastle Airport lies approximately 27 miles north west. Direct port facilities are at Seaham, 0.5 miles to the east. Nearby ports include Scarborough, Bridlington and RMS Europe. SITUATION Seaham Grange Industrial Estate is an established industrial estate located to the north west of Seaham. Units 8-13B occupy a prominent position in the heart of the estate. The estate is accessed via the B1285, which in turn is accessed via the A1018. Other occupiers within the estate include Northern Food, Pride Valley Foods, Norpat Laboratories Limited, Voyager Shiptech Limited, Prima Windows and Jaques Verte. GLEBE DR B1285 STOKTON ROAD B1285 LORD BYRONS WALK
A69 NEWCASTLE UPON TYNE A1 GATESHEAD SOUTH SHIELDS SUNDERLAND CONSETT A68 CHESTER-LE-SHEE DURHAM A1(M) EASINGTON SEAHAM DESCRIPTION The property comprises five modern industrial units dating from approximately 1997 in a combination of detached and semi-detached units extending to 64,500 ft 2. The units range in size from 3,700 ft 2 to 40,000 ft 2 and are of steel portal frame construction with external profile steel cladding built under a profiled steel pitched roof. Each unit benefits from roller shutter door access and has an eaves height extending to 20 ft for the larger units and 17 ft for the smaller terraced units. Each unit has a service yard with ample car parking and loading areas. A68 HARTLEPOOL BISHOP AUKLAND SHILDON A1(M) REDCAR STOCKTON-ON-TEES MIDDLESBROUGH ACCOMMODATION MARKET OVERVIEW Whilst East Durham has suffered as a consequence of the demise of its mining heritage and colliery towns, the local area has seen significant expenditure in recent years through Government backed projects. Over 300 million of investment has taken place in the area in the last decade which has reignited the local economy and established new businesses and extensive employment. Going forward, work has started on site at the 17,000,000 Hawthorn Business Park and a planning application was submitted in December 2007 to create a 180 acre film studio and associated services development, the first of its kind in the UK for 50 years which is likely to rival both Pinewood and Elstree Studios as a leading film and television production venue. For further details see www.easington.gov.uk. Unit Tenant Accommodation Lease Term Lease Expiry Next Review Rent ERV Comments (m 2 ) (ft 2 ) (Break Clause) (ft 2 ) (ft 2 ) 8 Coors 929.02 10,000 5 year lease 30.05.2010-37,500 42,500 Brewers Ltd from 31.05.2005 ( 3.75) ( 4.25) 9 International 3,716.09 40,000 15 year lease 24.10.2020 25.10.2010 147,000 160,000 Plastics from 25.10.2005 (25.10.2015) ( 3.67) ( 4.00) Systems Ltd 10 Homefair 696.76 7,500 8 year and 7 day 27.06.2015 20.06.2010 30,000 31,875 3 yearly Blinds (UK) Ltd lease from ( 4.00) ( 4.25) rent 20.06.2007 reviews 13A Nalco Ltd 325.15 3,500 12 year lease 25.08.2009-17,500 17,500 from 26.08.1997 ( 5.00) ( 5.00) 13B MB Air 325.15 3,500 5 year lease from 30.04.2009-16,000 17,500 Systems Ltd 01.05.2004 ( 4.57) ( 5.00) Total 5,992.19 64,500 248,000 269,375
ETL 9 12a 11 4 12 TENURE The property is held under two separate titles. The freehold element is highlighted in red, whilst the long leasehold element is highlighted in blue and is held on a lease dated 28 January 2000 for a term of 999 years at the rent of a peppercorn. TENANCIES The units are let in accordance with the attached tenancy schedule with all leases being drawn on a full repairing and insuring basis. A service charge is in place and covers the upkeep and maintenance of the common areas within the estate including the management fee. 3a 3b 12c El Sub Sta Seaham Grange Industrial Estate 5a 12b ENTERPRISE COURT 6a 6b 10 12 13a 13b ENTERPRISE COURT 8 10 CHEVYCHASE COURT 7 7 HALL DENE WAY 4 to 5 STOCKTON ROAD Ryedale East Leigh 1 to 3 Meadow Croft Braemore BM 71.10m 70.1m Mast Penryn 9 Byron House PARTNERSHIP COURT 69.2m GP El Sub Sta
ESTIMATED RENTAL VALUE The passing rents on the subject property range from 3.67 ft 2-5.00 ft 2 depending upon the size of each unit. The lack of new build accommodation in this location has had a positive effect on rental values on existing stock and as a consequence rents have steadily increased in recent years. Below is a list of comparable rental evidence that substantiates our view of rental value: Location Unit Size Transaction Rent Date Various Units, Byron House 800 ft 2 Open Market Letting 5.50 ft 2 Jan 2008 Units 4-6, Seaham Grange Food Park 7,500 ft 2 Open Market Letting 4.27 ft 2 Feb 2008 Unit 7, Seaham Grange Food Park 2,500 ft 2 Open Market Letting 5.20 ft 2 June 2007 Unit 8, Seaham Grange Food Park 2,500 ft 2 Open Market Letting 4.80 ft 2 Dec 2007 Unit A, Cold Heselton Industrial Estate 7,500 ft 2 Open Market Letting 5.00 ft 2 Feb 2004 Various Units, Admiral Point, Seaham 6-10,000 ft 2 Open Market Letting 4.50 ft 2 2007 Foxcover Industrial Estate 125,000 ft 2 Open Market Letting 4.75 ft 2 Jun 2007 Seaham Industrial Estate 135,000 ft 2 Open Market Letting 4.75 ft 2 Mar 2008 On this basis we are of the opinion that the small units have an Estimated Rental Value based on 5.00 ft 2, whilst for the larger units, up to 40,000 ft 2, a rental of 4.00 ft 2 should apply. On this basis the total Estimated Rental Value is 269,375 per annum. The owner occupier market has improved in recent years, and Unit 12A has sold recently at a price of 260,000 which reflects a capital value per square foot of 50.00. COVENANT INFORMATION Coors Brewers Limited (00026018) established in 1888 and involved in the brewing and distribution of alcoholic beverages, who for the year to December 2006 reported a turnover of 1 billion and pre-tax profits of 69,000,000. International Plastics Systems Limited (02506365) involved in the wholesale and distribution of plastic piping products, who for the year to August 2007 reported a turnover of 8,350,000, a profit of 1,609,000 and shareholders funds of 1,908,000. Homefair Blinds (UK) Limited (02020858) involved in the manufacture and wholesale of window blinds, who for the year to May 2007 reported shareholders funds of 1,227,000 and has an ICC credit limit of 150,000. The company has been trading since 1986. VAT The property has been elected for VAT which will therefore be payable on the purchase price. PROPOSAL We are instructed to seek offers in excess of 2,925,000 (Two Million Nine Hundred & Twenty Five Thousand Pounds) subject to contract and exclusive of VAT for our client s interest, which reflects an attractive net initial yield of 8.00%, an equivalent yield of 8.50% and a reversionary yield of 8.71%. Nalco Limited (00615548) involved in the sale of fuels, oils and metals, who for the year to December 2006 reported a turnover of 144,929,000, and shareholders funds of 50,082,000. MB Air Systems Limited (SC210643) who for the year to December 2006 reported shareholders funds of 1,217,000 and a pre-tax profit of 308,000. The company has been in existence since 2000.
FURTHER INFORMATION Dickon Wood 0191 279 0015 dickon.wood@kingsturge.com James Thompson 0191 279 0017 james.thompson@kingsturge.com King Sturge LLP 51 Grey Street Newcatsle upon Tyne NE1 6EE Crown Copyright 2007. All rights reserved. Promap licence number 100020449. King Sturge licence number 100017659. This plan is published for the convenience of identification only and although believed to be correct is not guaranteed and it does not form any part of any contract. Misrepresentation Clause: The accuracy of any description, dimensions, references to condition, necessary permissions for use and occupation and other details contained herein is not guaranteed and is for general guidance only and prospective purchasers or tenants must not rely on them as statements of fact or representations and must satisfy themselves as to their accuracy. Neither King Sturge nor any of its 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. 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 or fulfilling its intended function. Prospective tenants/purchasers should satisfy themselves as to the fitness of such equipment for their requirements. Under the Control of Asbestos at Work Regulations 2002 (CAW Regulations), the owner or tenant of the property, and anyone else who has control over it and/or responsibility for maintaining or repairing it, may be under a statutory obligation to detect and manage any asbestos or asbestos related compounds contained within the property. Failure to comply with the CAW Regulations is an offence and could adversely affect the value of the property. Subject to Contract Exclusive of VAT May 2008