OLD MILL SQUARE SHOPPING CENTRE STORRINGTON WEST SUSSEX, RH20 4NQ Shopping Centre Investment Opportunity Making commercial sense of property
INVESTMENT SUMMARY Established shopping centre located in the centre of Storrington. Good transport links located close to the A283 and adjacent to a car park and bus station. Purpose built retail precinct anchored by a Waitrose supermarket. 13 ground floor retail units and 10 office units on the first floor totalling 33,341 sq ft. 57% of the income secured on the covenants of Waitrose, Barclays Bank and Costa Coffee franchise. Potential to increase income from letting of vacant units. Potential to expand existing Waitrose Store. Potential to convert the upper parts to residential use, subject to planning. Current gross income 374,980 pa. ERV when fully let 452,730 pa. Price: 4,500,000 (four million five hundred thousand pounds), subject to contract and exclusive of VAT. Initial Yield: 7.04% Reversionary Yield: 9.53% Equivalent Yield: 9.33% Net of purchase costs of 5.5% and current non-recoverable costs on the vacant units. 2 2
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LOCATION The village of Storrington is one of 2 villages in the civil parish of Storrington and Sullington and lies at the foot of the north side of the South Downs in West Sussex. Storrington is situated some 60 miles to the south of central London, 9 miles north of Worthing and approximately 15 miles south of Horsham; Gatwick Airport is circa 25 miles to the north east. There are good road communications in the area with the A283 running through the village and providing access to the A24 approximately 3 miles to the east. There are railway stations at both Pulborough and Amberley, each within 3.5 miles. Storrington is an affluent village and Waitrose store draws significant custom from the surrounding villages. 4
SITUATION DEVELOPMENT POTENTIAL MANAGEMENT POTENTIAL Old Mill Square is located in the centre of Storrington. To the north of the property is the bus station and other commercial property, fronting Old Mill Drive, with residential properties on the western side of the road. The centre of the village is situated to the west of the property and comprises older more traditional units. To the north on Old Mill Drive are further residential properties and south of the property are other retail units including an HSBC Bank. DESCRIPTION The land to the rear of Waitrose is owned by Waitrose and there were advanced plans to expand the supermarket to approximately 34,000 sq ft. However, Waitrose have decided not to proceed at the moment but would be prepared to discuss options with the new owner of Old Mill Square. Some units were deliberately left vacant to facilitate development of the expanded Waitrose unit. The proposed extension was subject to a Section 106 agreement and the grant of planning permission dated 23.5.2013. There is the opportunity to renew the existing leases and let the vacant units which will produce additional income or convert the offices to residential units, subject to the grant of planning consent. The Shopping Centre has a prominent frontage to Old Mill Drive which is easily visible from the High Street. On the ground floor the property provides 13 retail units which are occupied by 8 tenants. Two of the retail units are currently vacant. The retail units are formed around a central square with predominantly office accommodation at first floor level accessed from two staircases from the ground floor. Access to the ground floor retail units is from either the rear car park or from the front of the property between Barclays Bank and unit 25. There is vehicular access to the property through the public car park which is run by Horsham District Council. The property is of concrete frame construction with rendered elevations under a flat roof. Old Mill Drive frontage 5
SCHEDULE OF AREAS Unit Tenant GIA Sq Ft NIA Sq Ft NIA Sq M ITZA Sq Ft Service Charge Units Ground Floor - Retail 1 & 2 Barclays Bank plc 1,456 135.27 1,148 2 Barclays Store & Strong Room 179 16.63 Barclays 1st Floor 118 10.96 3 St Barnabas Hospice 925 85.93 625 1 4 P&R Tomsett 849 78.87 598 1 5 Martin Steels Ltd 858 79.71 598 1 6 Geet Yeung 876 81.38 612 1 7 CM & IT Hanwell 888 82.5 616 1 8 CM & IT Hanwell 944 87.7 621 1 8a CM & IT Hanwell 681 63.27 581 1 10-Sep Premiere Coffee Ltd 1,651 153.38 1,085 2 11 Vacant 654 60.76 526 1 12 & 13 Waitrose Ltd 7,525 3 Waitrose Ltd 1st Floor 5,081 25 Vacant 522 48.49 432 1 First Floor - Offices 14 Colin Buck 960 89.19 1 15 Vacant 636 59.09 1 16 Vacant 637 59.18 1 17 P Reed 657 61.04 1 18 Vacant 633 58.81 1 19-20 Anderson Rowntree 3,043 282.7 2 21 Vacant 855 79.43 1 22 A Step Ahead Ltd 597 55.46 1 23 Vacant 593 55.09 1 24 Vacant 1,523 141.49 1 Total 12,606 20,735 1,926.33 27 6 Note on floor areas: Ground floor shop units 3, 4, 5, 6, 7-8 all include rear extensions.
RENTS The current gross rent is 374,980 pa and the net rent is currently 334,530 pa allowing for non recoverable costs such as service charge and empty rates on the vacant units. The estimated rental value of the centre when fully let is 452,730 pa. SERVICE CHARGE The leases are drawn on equivalent full repairing and insuring terms. There is a service charge for the maintenance of the common areas which equates to a circa 1,200 pa service charge cost per unit as indicated in the Schedule of Areas. A copy of the service charge is available in the dataroom. TENURE Freehold. 67
TENANCIES - RETAIL UNIT TENANT LEASE RENT REVIEW (BREAK) RENT PA ERV ( ) ITZA RENT PSF COMMENTS Ground Floor - Retail 1 & 2 Barclays Bank plc 5 yrs from 24.03.2013 3 St Barnabas Hospice (Sussex) Ltd 20 yrs from 24.06.1993 4 P and R Tomsett 20 yrs from 24.06.1993 5 Martin Steels Ltd 10 yrs from 15.05.2014 6 Geet Yeung 19 yrs from 02.01.2015 7 CM and IT Hanwell 21 yrs from 24.06.1992 8 CM and IT Hanwell 21 yrs from 24.06.1992 8a CM and IT Hanwell 21 yrs from 24.06.1992 9-10 Premiere Coffee Ltd 10 yrs from 23.03.2015 26,250 22.95 Tenant renewed lease in 2013. 15,000 24.00 Tenant holding over. 17,000 28.50 T/A Truffles. Tenant holding over. 15.05.2019 14,500 24.25 Tenant relocated from Unit 11. 02.01.2019 and 5 yearly 25.03.2020 (Break 25.03.2020) 16,000 26.25 T/A The Plaice. 8,000 rent deposit. 17,000 27.60 T/A Hanwells Hardware. Tenant holding over. 14,250 23.25 Tenant holding over. 16,500 28.50 Tenant holding over 29,000 26.75 T/A Costa Coffee Rent free until 23.12.2015. 11 Vacant To Let 14,000 12 & 13 Waitrose Ltd 15 yrs from 24.02.2013 24.2.2018 24.2.2023 155,000 12.30 Supermarket 25 Kiosk Vacant To Let 12,500 8
TENANCIES - OFFICES UNIT TENANT LEASE RENT REVIEW (BREAK) RENT PA ERV ( ) RENT PSF COMMENTS First Floor - Offices 14 C.G. Buck 15 yrs from Sept 2014 2019 2024 15-16 Vacant to let 12,750 17 P Reed 10 yrs from 24.06.2004 18 Vacant to let 7,000 19-20 CJD Wise & W J Stisted 15 yrs from 17.06.2015 17.06.2020 17.06.2025 (17.06.2020) (17.06.2025) 21 Vacant to let 9,000 9,650 10.05 Dental Surgery relocation from Unit 21. Lease to be completed. 7,000 10.60 Hairdressers. Tenant holding over. Lease awaited. 31,830 10.46 T/A Anderson Rowntree Solicitors. Rent free until 17.09.2015. 22 A Step Ahead Ltd 3 yrs 6,000 10.05 Under offer. 3 year lease. 3 months rent free. Outside the 1954 Act regarding security of tenure. Mutual option to determine after 2 years. 23 Vacant to let 6,500 24 Vacant to let 16,000 Total 374,980 77,750 9
WAITROSE Waitrose is a chain of British supermarkets, which forms the food retail division of Britain s largest employee-owned retailer, the John Lewis Partnership. Its head office is located in Bracknell, Berkshire, England. As of February 2015, Waitrose has 322 branches across the United Kingdom, including 30 little Waitrose convenience stores, and a 5% share of the market, making it the sixth-largest grocery retailer in the UK. Turnover of 6 billion a Pre tax profit of 126.6 million and an operational profit of 310.1 million in 2014/15. BARCLAYS BANK Reported a profit of 2.28 billion and a turnover of 25.288 billion in 2014/15. PREMIERE COFFEE LTD Premiere Coffee Ltd are franchisees for Costa Coffee with over 25 coffee shops. Reported a pre tax profit of 1.742 million on a turnover of 14.4 million for the period ending 30.4.14. 10
PROPOSAL EPC CONTACT Price 4,500,000 (four million five hundred thousand pounds) subject to contract and exclusive of VAT. This shows a net initial yield of 7.04% rising to 9.53% on the lettings of the vacant units. The overall equivalent yield being 9.33% net of purchase costs and non-recoverable service charge/rates on the vacant units of 40,450. Any rent free periods outstanding on completion will be covered by way of a price adjustment. VAT We understand the property is registered for VAT and therefore VAT will be payable on the purchase price unless acquired by way of a Transfer of a Going Concern. EPC s relating to the property are available in the Dataroom access available on request. DATAROOM Lease and other documentation relating to the property are available in the Dataroom access available on request. VIEWING Strictly by appointment through the sole agents. Julian Walker Tel: +44 (0)23 8082 0905 Mobile: +44 (0)7836 774 406 jwalker@vailwilliams.com Ian Froome Tel: +44 (0)23 9220 3205 Mobile: +44 (0)7836 256872 ifroome@vailwilliams.com Toby Yates Tel: +44 (0)20 3589 0089 Mobile: 07881 500995 tyates@vailwilliams.com Liz Dixon (Dataroom access) ldixon@vailwilliams.com 02380820919 Vail Williams LLP Meridians House 7 Ocean Way, Ocean Village Southampton, SO14 3TJ Bus area to the north of Waitrose Car Park 11
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