Gwent Shopping Centre Tredegar NP22 3EJ High yielding shopping centre investment On the instructions of AB Hughes and JP Smith joint LPA Receivers
53 54 Gwent Shopping Centre Tredegar NP22 3EJ High yielding shopping centre investment Investment Considerations g Located in Tredegar, South Wales which has a district population of 85,000 persons g The property comprises a shopping centre currently arranged as 31 units providing in total 81,014 sq ft (7,526.38 sq m) of retail and ancillary accommodation g Anchor tenants include Tesco, Homebargains, Superdrug, Factory Shop, Greggs, Farmfoods and Boots the Chemist g The overall current gross income from the property is 381,900 per annum of which approximately 75.6% is secured on national retailers g Significant asset management opportunities g Offers sought in excess of 2.5 million reflecting an attractive initial yield of 14.4% and a net initial yield after irrecoverables of 11.3%. Location Tredegar is located in the county borough of Blaenau Gwent, within the historic boundaries of Monmouthshire. The town is approximately 30 miles north of Cardiff, 15 miles west of Abergavenny and 6 miles east of Merthyr Tydfil. The town is accessed via the main A465 Heads of the Valleys Road which is the main arterial road from the A40 and M50 Motorway to the east to the A470 to the west which provides access to junction 32 of the M4 motorway. Tredegar has a resident population of 14,800 persons with an immediate catchment area of circa 85,000 persons. There is a rail service to Cardiff Central from Ebbw Vale Parkway, which was reopened in 2008, and provides a fastest journey time of 56 minutes. The Gwent Shopping Centre is the main retail provision for Tredegar together with some further local retail offer on Commercial Street. The town centre car parking provision is adjacent to The Gwent Shopping Centre and comprises 168 car parking spaces. The car park is owned and managed by the council and operates free of charge. The town centre bus stops are situated adjacent to the car park. COMMERCIAL STREET Car Park Description 35 34 36 39 to 55 43 48 95 91 86 1 6 27 PC 8 10 9 20 Shelter 12 11 Tunnel Shelter 18 19 17 TREDEGAR 16 Gwent Shopping Centre Car Park Crown copyright licence number 100024244 Savills (UK). Not to Scale - For Identification Purposes Only. The property comprises a shopping centre constructed in the late 1960 s, which has been subsequently refurbished. The shopping centre is a L shaped uncovered scheme of concrete frame construction with brick elevations under a slate roof. Servicing to the majority of the scheme is to the rear via a dedicated access road. There is an entrance to the shopping centre from Commercial Street and an additional entrance to the rear of the scheme from the town centre car park. Access to the car park is via the road that runs parallel to Commercial Street and a subway that runs underneath the property. The shopping centre in its current configuration currently comprises 31 retail units. The total floor area is 81,014 sq ft (7,526.38 sq m) comprising 51,890 sqft ( 4,820 sq m) of ground floor sales and ancillary accommodation at ground and first floor level.
Gwent Shopping Centre Tredegar NP22 3EJ High yielding shopping centre investment Tenure Freehold. Income Profile The property currently produces a gross income of 381,900 per annum, with the landlord topping up the phased rent on unit 5/ 6 (Boots) and 20/21 (JD Hull). 75.6% of the income is secured to national operators. The WAULT is 5.44 years to tenant breaks. The majority of the leases are drawn on effective full repairing and insuring terms with the recovery of landlord s costs through a service charge. There are currently 9 units vacant representing 21.01% of the total floor space. The total irrecoverable expenditure (with landlord s rates, insurance and service charge guarantee on 12a and 12b) is 81,800. This produces a net rent passing of 300,100 per annum. The service charge budget for the year ending 2013 is 113,448 per annum The service charge information is available on request. Asset Management Opportunities In addition to anchor lettings to Home Bargains and Tesco and securing the lease renewal of Boots the Chemist, the landlord has received a proposal from Iceland to take Unit 12a and 12b, subject to landlords works, on the basis of a 10 year lease with 5 year break at a rent, inclusive of service charge, of 40,000 per annum in year 1&2, 45,000 per annum in year 3, 47,500 per annum in year 4 and 50,000 per annum in year 5. It is anticipated that various works will be required to facilitate this letting with an overall cost of circa 200,000 The vendors are leaving the purchaser to conclude the letting and carry out the works but will provide a 12 month empty rates and service charge guarantee in respect of these units. Assuming this is finalised, the vacancy would reduce to 6 units 11.68% of the floor space. The property will generate a gross income of 421,900 per annum. The irrecoverable expenditure will be 94,822 per annum and the net rent passing will be 327,078. 77.9% of the income would secured to national operators. We believe that post the letting to Iceland the occupational position will strengthen further, which in turn will enhance the lettability of the remainder of the scheme. We envisage a national discount retailer taking the remaining larger unit, next door to Home Bargains and Iceland and A1/A3 occupiers taking the smaller units. The property includes an area previously used as an open air market which may have future development potential, subject to planning. Accommodation & Tenancy Details of the individual units and size are contained within the Tenancy and Accommodation Schedule set out below:-
Gwent Shopping Centre Tredegar NP22 3EJ High yielding shopping centre investment Premises Tenant Trading As Rent pa Term Term Commencement Unit 1 Imperial Cancer Research Fund Imperial Cancer Research Term Expiry Next Rent Review Break Option Sales (sq. ft) ITZA Sales First Floor Basement 10,500.00 10 years 05.07.2005 04.07.2015 06.07.2010 433 564 368 423 1,355 Unit 2 Shaw (Cardiff) Shaws 5,000.00 2 years 06.02.2013 26.04.2015 492 646 459 1,105 Tenant pays service charge only not insurance. Unit 3 Aldo Ricci, John Ricci Lucky Strike 11,500.00 10 years 25.12.2006 24.12.2016 24.11.2011 471 609 327 936 Unit 4 Gus Jones Gus Jones Jewellers 10,700.00 10 years 29.09.2005 28.09.2015 29.09.2010 492 640 361 1,001 Units 5&6 Boots the Chemist Boots 20,000.00 5 years 10.04.2013 10.04.2018 1,149 1,512 1100 2,612 Lease renewal. 10,000pa for first 2 years. Rent increases to 20,000pa with effect from 10.04.2015. The vendor is proposing to top up the rent. Unit 7 Vacant 495 649 345 994 Unit 8 Vacant 489 641 641 Units 9&10 YMCA YMCA 0 1 year 30.07.2012 29.07.2013 Mutual at anytime on one month s notice. Total NIA (Sq. ft) Comments 1,035 1,366 556 1,922 Lease inclusive of service charge and insurance. Holding over. Unit 11 University of Wales University of Wales 15,500.00 5 years 26.07.2011 25.07.2016 Tenant on 25.03.14 430 430 2,561 2,991 Tenant must give 3 months notice to exercise break. Unit 12 Vacant 322 907 907 Unit 12a Vacant 1,352 3,617 1168 4,785 Unit 12b Vacant 1,167 1,830 945 2,775 Strong interest from Iceland in units 12a & 12b combined. Further information available on request. Units 13&14 Farmfoods 34,500 20 years 17.04.2002 16.04.2022 17.04.2012 N/A 4,198 3113 7,311 Unit 15 Vacant 1,600 2,257 2361 4,618 Unit 15a John Barkway Marions Cards 8,000 2 years 31.10.13 20.10.15 501 698 264 962 Unit 16 Russell Lloyd Get Fresh 5,000 5 years 03.12.13 02.12.18 Mutual 6 months notice 02.12.15 320 437 176 613 Fixed rent increases: Year 2 7,500pa, Year 3, 4 & 5 8,000 Unit 17 Greggs PLC Greggs 17,000 10 years 24.06.2005 23.06.2015 23.06.2010 699 987 338 1,325 Unit 18 HSBC HSBC 13,500 10 years 01.02.2007 31.01.2017 01.02.2012 531 748 303 1,051 Not in occupation Unit 19 HSBC HSBC 14,350 8 years, 2 04.11.2008 31.01.2017 04.11.2013 532 751 751 months and 28 says Unit 20 JD Hull & Associates James Desmond Hull Dental Practise 13,250 10 years 08.05.2005 24.06.2020 08.05.2015 545 784 160 944 Lease extensions agreed to 2020 at same rent with 1 year rent free averaged over 2yrs. Unit 20 rent 6,625 pax from 12.09.2012 to 11.09.2014. Unit 21 paying 7,000 pax until 12.12.2014. Vendor is proposing to top up the rent. Unit 21 JD Hull & Associates James Desmond Hull Dental Practise 14,000 10 years 12.09.2012 24.06.2020 08.05.2015 522 728 267 995 See above Unit 22 Vacant 330 458 188 646 Unit 22a Cheque Centre Properties Cheque Centre 8,500 10 years 28.04.2011 27.04.2021 28.04.2016 Tenant on 28.04.2016. 327 449 186 635 Unit 23 Vacant 322 431 168 599 Lease surrendered. Marions Cards moved to Unit15a. Unit 24 Sportswift Card Factory 0 1 year 09.11.2012 08.11.13 Mutual Break on 3 515 721 343 1,064 Holding Over. Service charge and rates only months notice at anytime. Unit 25 Vacant 511 712 343 1,055 Unit 26 G & J Shaia G & J Shaia 16,750 10 years 14.10.2004 13.10.2014 01.11.2009 607 884 914 1,798 Recent assignment AGA from R+R Retail. Rent Deposit Unit 27(20a) The Factory Shop The Factory Shop 32,500 15 years 22.04.2010 21.04.2025 Fixed Increases 1,439 6,177 6,767 2110 15,054 35,873.71 year 5-10, 40,588.04 year 10 service charge capped at 6,000 pa. Unit 27a(20b) Superdrug Stores Superdrug 25,750 10 years 14.08.2005 13.08.2015 14.08.2010 1,021 2,282 625 1,105 4,012 S/c capped at 1265.86 (2011) plus PRI Unit 28a Tescos Stores Tesco 40,000 20 years 14.11.2011 13.11.2031 13.11.16, 2021 and 26 Tenant on 14.11.2021. 4,445 4,445 Unit 28b TJ Morris Home Bargains 65,000 15 years 11.11.2011 10.11.2026 11.11.2016 and 21 Unit 100 Photo-Me International PLC Photo- me International PLC Tenant on 11.11.2021. 10,332 780 11,112 S/c capped at 10,000 pa 600 Turnover based rent paid monthly. Request to reduce commission payment by half. Total 381,900.00 33,426 51,890 81,014
Gwent Shopping Centre Tredegar NP22 3EJ High yielding shopping centre investment VAT The property has been elected for VAT, however, it is anticipated the sale will be treated as a transfer of a going concern (TOGC). Proposal We have been instructed to seek offers in excess of 2,500,000 (Two Million Five Hundred Thousand Pounds) for our clients freehold interest subject to contract and exclusive of VAT. An acquisition at this level, assuming purchaser s costs of 5.8%, reflects the following yield profile: Initial Yield 14.4% Net Initial Yield after irrecoverables 11.3% Further Information Andrew Main Andrew Phillips Ross Griffin Savills Savills Savills Tel: 0117 910 2207 Tel: 0117 910 2354 Tel: 02920 368 961 amain@savills.com adphillips@savills.com rgriffin@savills.com John Benson Gemma-Jane Ogden Alder King Alder King Tel: 0117 317 1100 Tel: 0117 317 1108 jbenson@alderking.com gogden@alderking.com Subject to Contract Misrepresentation Act Messrs Savills UK and Alder King LLP 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, references to condition and necessary permission for use and occupation and other details are given in good faith and are believed to be correct but any intending purchasers should not rely on them as either statements or representation of fact but must satisfy themselves by inspection or otherwise as to the correctness of each of them. All dimensions are approximate. 3. No persons in the employment of Messrs Savills UK and Alder King LLP have any authority to make or give any representation or warranty whatsoever in relation to this property. 4. All correspondence regarding this offer is subject to contract. 5. OS Maps:- Reproduced from the Ordnance Survey Map with the permission of the Controller of H.M. Stationery Office. Crown copyright licence number 100024244 Savills (UK). Published for the purposes of identification only and although believed to be correct accuracy is not guaranteed. January 2014 Crown copyright licence number 100024244 Savills (UK). Not to Scale - For Identification Purposes Only.