Single Let Warehouse Industrial Investment Smiths Metal Centres, Pegasus Drive, Stratton Business Park, Biggleswade, SG18 8QB
INVESTMENT SUMMARY n The property is excellently located adjacent to the A1 dual carriageway 1 mile to the south of Biggleswade town centre n Detached warehouse unit of 7,271.96 (78,276 sq.ft) n Low site cover of 36% n Freehold n Let for a further 9 years to Smiths Metal Centres Ltd n Tenant break option in April 2020 subject to a 9 month break penalty n Tenant has been in occupation for 25 years n Rent 397,000 per annum ( 5.07 per sq.ft) n Offers sought in excess of 5,000,000 n Net initial yield 7.50%, assuming costs of purchase of 5.80% LOCATION Biggleswade is located immediately to the east of the A1 in Bedfordshire 11 miles south east of Bedford, 17 miles south west of Cambridge, 32 miles to the south east of Northampton and 45 miles north of London. The town enjoys excellent road communications with the A1 providing direct access to the M25, 32 miles to the south and the A1 (M), 20 miles to the north. The A421 is 7 miles to the north, via the A1, which provides dual carriageway access to the M1, 18 miles to the east. The town is served by a well-connected rail service, situated on the East Coast Mainline and benefitting from a direct half-hourly service to London Kings Cross to the south (45 minutes) and Peterborough to the north (35 minutes). Luton airport is 24 miles to the south west and offers scheduled and chartered services to around 90 destinations including daily flights to important business centres such as Amsterdam, Paris, Zurich, Geneva and New York. Stanstead airport is 32 miles to the south east.
Phase One London Road Retail Park Quest Automotive Products Alma Engineering Bowman Ingredients Liebherr icandy U Ramp SITUATION Stratton Business Park is Biggleswade s main industrial estate, situated immediately adjacent to the A1, to the south of the town. The subject property is prominently situated at the entrance to the estate, with car park access off Pegasus Drive and separate loading access off Montgomery Way. London Road (A6001) Nearby occupiers on Stratton Business Park include The Jordan and Rivita Company, Kramp Group, Liebherr, icandy, Quest Automotive Products, Turpin Services and Bibby. Travis Perkins has recently developed a new builders merchants immediately to the rear of the property. Gazeley s G Park is located directly to the south of Stratton Business Park and extends to 26 acres with outline consent for over 530,000 sq.ft of distribution space. A1 London Road Retail Park is located adjacent to the business park and a second phase of the park has been developed adjacent to the property. The park is currently undergoing a comprehensive redevelopment by developer LXB and occupiers include M&S, Next, H&M, River Island, Outfit, TX Maxx, Homebase, Laura Ashley, Pets at Home and Boots. Phase Two London Road Retail Park Turpin Travis Perkins Saxon Foods G Park Phase Two Jordans Foods Bibby
DESCRIPTION The property comprises a detached two bay distribution warehouse that was developed in the early 1990s. The property is of steel portal frame construction with a combination of brick and metal profile clad elevations with a metal profile clad roof incorporating translucent panels. Two storey offices are situated to the front elevation. The warehouse is served by four level access doors and the eaves height within the warehouse is 5.7 metres. Lighting is provided by a combination of strip lighting and sodium light boxes. Heating is provided throughout the warehouse via ambirad heaters. The tenant has installed two 5 tonne gantry cranes in each bay to the rear and two 3 tonne cranes to the front of the warehouse. The offices are set out over ground and first floor with a passenger lift providing access to the first floor. The office specification comprises suspended ceilings with recessed lighting and air conditioning cassettes, floor boxes and doubled glazed windows. Within the offices there is a staff canteen on the ground floor and male and female toilets on both the ground and first floors. Externally to the front elevation is a 53 space car park accessed off Pegasus Drive. To the rear and side elevations are extensive yard areas, with the rear yard accessed off Montgomery Way. The tenant will shortly be re-fencing the external boundary of the property and installing a barrier entry system. This has been documented under a licence to alter. SITE AREA The site extends to 2.00 hectares (4.94 acres). The property has a low site density of 36%.
ACCOMMODATION The property has been measured in accordance with the RICS Code of Measuring Practice 6th Edition and extends to the following gross internal areas: Floor Description Sq.m Sq.Ft Ground Warehouse 6,434.65 69,263 Ground Office 417.37 4,493 First Office 419.94 4,520 Total 7,271.96 78,276 TENURE Freehold. TENANCY The property is let to Smiths Metal Centres Ltd for a term of 20 years from 21 April 1998, expiring 20 April 2018. The tenant has signed a reversionary lease for a term of 7 years from 21 April 2018, expiring 20 April 2025 (9 years unexpired). The current rent is 397,000 per annum ( 5.07 per sq.ft). The lease and reversionary lease are held on full repairing and insuring terms subject to an upward only rent review to open market value on 21 April 2020 (assumed term of 5 years). The tenant has an option to break the reversionary lease on 20 April 2020 subject to six months written notice and a break penalty equivalent to nine months rent. The tenant has been granted a 12 month rent free period expiring February 2017, following the completion of the reversionary lease. The vendor will top up the rent free period by way of a pro-rata deduction from the purchase price.
COVENANT Smiths Metal Centres Ltd is a stockholder and supplier of all forms of aluminium, brass, bronze, copper and steel as well as many other metals and plastics. The company operate from 13 locations in the UK with the head office situated at the subject property. The company was established in 1780 and supply to the retail, agriculture, transport, motorsport, petrochemical and construction industries. Smiths use the subject property for the storage and distribution of stock but also for the engineering of products prior to distribution to customers. The company has been in occupation of the property since it was developed in the early 1990s. A summary of the company s accounts is set out below: Smiths Metal Centres Ltd (No. 03485838) 31/12/2014,000s The company has a Dun and Bradstreet rating of 3A1. 31/12/2013,000s 31/12/2012,000s Turnover 62,256 58,962 62,138 Profit before Tax 5,324 3,033 2,785 Net Assets 16,541 11,977 9,537 INDUSTRIAL INVESTMENT MARKET Address Tenant Area Sq.ft 70 Sinclair Drive, Park Farm Industrial Estate, Wellingborough Advantage One, Third Avenue, Milton Keynes Tollgate Business Park, Stafford Unit 1 Northampton Centre, Crow Lane Industrial Estate, Northampton Market Garden Road, Stratton Business Park, Biggleswade Woodbury Lane, Worcester Ricoh UK Products Term Certain Transaction Date 118,958 5.4 yrs Sold Jan 2016 Bitzer UK 28,484 9.4 yrs Sold Sep 2015 Elster Metering NNR Global Logistics Bibby Bibby 55,181 4.7 yrs Sold Sep 2015 63,667 4.9 yrs Sold Aug 2015 141,000 7.0 yrs Sold Feb 2015 92,402 5.7 yrs Sold Jan 2015 Waterside Park, Wednesbury Blakemore 83,378 9.7 yrs Sold Dec 2014 Price Yield % 6,630,000 6.90 2,165,000 6.22 4,110,000 7.12 3,130,000 7.25 13,690,000 6.80 6,400,000 6.91 6,300,000 6.10
VAT The property is elected for VAT and therefore VAT will be payable on the purchase price. It is anticipated that the sale will be dealt with as a TOGC. PROPOSAL We are instructed to seek offers in excess of 5,000,000 (Five Million Pounds) subject to contract and exclusive of VAT. A purchase at this level would reflect a net initial yield of 7.50%, assuming usual costs of purchase of 5.8%. CONTACTS For further information or if you wish to arrange a viewing, please contact :- BEN BLACKWALL 0121 513 0893 ben.blackwall@fspproperty.co.uk ANDREW FRANCK-STEIER 0121 513 0891 andrew.franck-steier@fspproperty.co.uk Franck Steier Price Ltd Third Floor, Victoria House 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.