FREEHOLD SOUTH EAST INDUSTRIAL WAREHOUSE WITH FUTURE RESIDENTIAL DEVELOPMENT POTENTIAL
INVESTMENT SUMMARY Well located industrial warehouse in Brentwood, a major commercial centre strategically located on the A12 providing direct access to Junction 28 of the M25 and Central London. The property comprises a single let, single storey 3 bay industrial warehouse extending to 48,362 sq ft (4,493.0 sq m) Gross Internal Area. The property is let to Macarthys Laboratories Ltd (rated 5 A1 by Dun & Bradstreet) until 24 December 2030, with a mutual break option on 24 December 2025, therefore providing approximately 15.1 years to lease expiry and 10.1 years to lease break. The total rent is 365,000 per annum reflecting 7.55 per sq ft. Freehold Future residential development potential, subject to planning. The property is situated on a site of approximately 2.20 acres with a site cover of 47%. We are instructed to seek offers in excess of 4,800,000 (Four Million Eight Hundred Thousand Pounds), subject to contract and exclusive of VAT. A purchase at this level reflects a Net Initial Yield of 7.19%, allowing for purchaser s costs of 5.80%, representing a Capital Value of 99 per sq ft. 2
RIVER THAMES CENTRAL LONDON M25 M25 J28 A12 UNIT G HUBERT ROAD BRENTWOOD ESSEX CM14 4JE BRENTWOOD STATION CAR PARK A1023 HUBERT ROAD BRENTWOOD STATION CREST NICHOLSON RESIDENTIAL DEVELOPMENT IFDS KINGS ROAD BT BRENTWOOD TOWN CENTRE 3
Brentwood is an affluent commuter town located 1.4 miles from Junction 28 of the M25, London's Orbital Motorway. 50 MILES 100 MILES 150 MILES 200 MILES LOCATION 250 MILES Distances are approximate The property is located in Brentwood, an affluent commuter town in Essex, located in the north east quadrant of the M25 motorway, approximately 20 miles north east of Central London and 12 miles west of Chelmsford. The town benefits from excellent transport links with Junction 28 of the M25 motorway being situated approximately 1.4 miles south west. The A12, which runs through Brentwood, provides a direct route to Central London. Brentwood Station is located 1.5 miles from the property with direct services to London Liverpool Street with a journey time of approximately 35 minutes. Stansted Airport is easily accessible via the M25 / M11 motorways with a travelling time of approximately 40 minutes. In addition, Brentwood will have a station on the Crossrail line, linking Heathrow Airport in the west to Shenfield in the east. BRENTWOOD M25 JUNCTON 28 1.4 MILES LONDON LIVERPOOL STREET 35 MINUTESS 4
SITUATION The property is located at the southern end of Hubert Road, which is in Brentwood's principal industrial area, just half a mile east of Brentwood town centre. Hubert Road is situated off the A1023, the main arterial road running through Brentwood and provides direct access to the M25, London's Orbital Motorway, via Junction 28 and the A12 both within 1.5 miles. To the west of the property is a Crest Nicholson residential development providing approximately 400 dwellings set within a landscaped area adjacent to Brentwood Train Station. Neighbouring occupiers include; BT, International Financial Data Services, Formula One Autocentres, Edmundson Electrical, Care co, Bakers Labels and Group Tyre. UNIT G HUBERT ROAD BRENTWOOD ESSEX CM14 4JE 5
DESCRIPTION The property was constructed in the 1980 s and comprises a detached single storey three bay industrial warehouse with ancillary office accommodation. The property is set within a rectangular site with concrete yard areas to the north, east and south of the building. The building is of a steel portal frame construction under a pitched roof and provides clear internal eaves height of 6.4m. SITE The property occupies a site of approximately 2.20 acres (0.89 hectares) and has a site cover of approximately 47%. The property originally had five roller shutter loading doors to the north elevation, however two have been blocked up by the tenant. In the centre of the northern yard area adjacent to the building is a covered loading bay with a 4ft high loading platform. Depot F2 6 to 21 The secure site has two vehicle entrances, one to the north which has its own manned gatehouse and one to the south east corner of the site. The property has approximately 50 car parking spaces. Internally the property has been fitted out by the tenant to suit their occupational requirements. Sub Sta Tank Boardman Place ACCOMMODATION Warehouse The property has been measured in accordance with the RICS Code of Measuring Practice 6th Edition and provides the following approximate Gross Internal Floor Area. B2 Warehouse GROSS INTERNAL AREA DESCRIPTION SQ FT SQ M Warehouse 40,917 3,801.3 Ground Floor Offices 3,677 341.6 First Floor Offices 3,651 339.2 Gatehouse 117 10.9 For indicative purposes only TOTAL AREA 48,362 4,493.0 m 10m 20m 30m Covered Canopy 1,799 167.1 OVERALL TOTAL AREA 50,161 4,660.1 TENURE Freehold. EPC The property has an Energy Performance Certificate rating of D-84. 6
TENANCY The property is let in its entirety to Macarthys Laboratories Ltd (company no. 620024), trading as Martindale Pharma, on a Lease expiring 25 December 2020, with a tenant option to determine the lease on 25 December 2015. The tenant has exercised the option to determine and the current lease will come to an end on 25 December 2015. The tenant has then entered into a Reversionary Lease, on Full Repairing and Insuring terms, for a term of 15 years commencing on 25 December 2015 at a passing rent of 365,000 per annum (reflecting 7.55 per sq ft). The Reversionary Lease has been contracted Outside of the Landlord and Tenant Act 1954. The Reversionary Lease has upward only rent reviews at the 5th and 10th years of the term. There is a mutual break option on 24 December 2025 on 9 months' written notice. The Landlord's ability to exercise their break option is subject to the demolition or reconstruction of the premises or a substantial part of it. The tenant has been granted a four month rent free period from 25 December 2015 which will be topped up by the Vendor. We understand the property is let in accordance with the below tenancy schedule; TENANT AREA (SQ FT) AREA (SQ M) LEASE START EXPIRY DATE BREAK OPTION RENT (PA) RENT (PSF) WAULT (TERM CERTAIN) COMMENTS Macarthys Laboratories Ltd (620024) 48,362 4,493 29/09/1999 24/12/2030 24/12/2025 (Mutual) 365,000 7.55 15.1 years (10.1 years) The tenant has been granted four months rent free which will be topped up by the Vendor. 7
COVENANT MACARTHYS LABORATORIES LIMITED (Company No: 620024) Macarthys Laboratories Limited is a manufacturer and distributer of speciality pharmaceuticals and services for healthcare professionals in the UK and Worldwide. The tenant has recently won an NHS contract which they run from the building. Martindale Pharma have two further sites in Romford and employ over 300 employees across the three sites. Macarthys Laboratories Limited has a Dun & Bradstreet rating of 5 A1 which represents a minimum risk of business failure based on a Tangible Net Worth of 62,865,000. Macarthys Laboratories Limited has produced the following most recent accounts: 31/12/2014 31/12/2013 31/12/2012 TURNOVER 67,095,000 69,367,000 67,947,000 PROFIT / (LOSS) BEFORE TAXES 14,267,000 17,439,000 8,354,000 TANGIBLE NET WORTH 62,865,000 54,411,000 42,235,000 NET TANGIBLE ASSETS (LIAB.) 53,511,000 43,829,000 33,729,000 We are of the opinion that the covenant would be viewed favourably in the current market. 8
INVESTMENT MARKET The industrial investment market has proved incredibly competitive during the last 18 months. Prime stock remains in short supply, however when there have been opportunities they have been hotly contested, with competitive bidding environments helping achieve premium prices. This has been especially true for prime assets located in Greater London and the South East as investor sentiment towards location, risk and vacancy risk improves. There have been several recent comparable transactions of note, a number of which are highlighted below:bc DATE ADDRESS TENANT SIZE (SQ FT) WAULT (TO EARLIEST EXPIRY) PRICE NET INITIAL YIELD CAPITAL VALUE (PER SQ FT) Under Offer Snodland, Maidstone Norbert Dentressangle 77,841 5.0 years 6.92m 6.10% 89 Under Offer Cardinal Distribution Park, Huntingdon Co-Operative 98,747 4.0 years 9.36m 5.40% 95 October 2015 140 London Road, Brentwood Allen Ford Accident Repair Ltd (Car dealership) 19,701 13.5 years 3.66m 6.50% 186 August 2015 15-16 Hickman Avenue, Highams Park, Chingford Proportion London Limited 57,600 4.0 years 6.29m 5.20% 109 August 2015 Unit 4, 500 Purley Way, Croydon John Heath & Co Limited 96,985 6.5 years 9.45m 6.20% 97 July 2015 Lexicon House, Midleton Industrial Estate, Guildford Access Plus Marketing 30,775 3.8 years 4.90m 5.71% 156 April 2015 Burnt Mills Industrial Estate, Watkins Close, Basildon Activair (UK) Ltd 37,958 4.7 years 3.54m 6.51% 93 April 2015 Unit 1, Crossways Business Park, Dartford Colour Con Ltd 20,215 5.0 years 2.40m 6.16% 119 9
FURTHER INFORMATION VAT We understand the property has been elected for VAT and hence anticipate the sale will be undertakenas a transfer of a going concern (TOGC). For additional information or to arrange an inspection please contact: CAPITAL ALLOWANCES Further information is available on request. INVESTMENT PROPOSAL We are instructed to seek offers in excess of 4,800,000 (Four Million Eight Hundred Thousand Pounds), subject to contract and exclusive of VAT, for our client's Freehold interest. A purchase at this level reflects a Net Initial Yield of 7.19%, allowing for purchaser s costs of 5.80%, reflecting a Capital Value of 99 per sq ft. Will Gubb Knight Frank LLP 55 Baker Street London W1U 8AN T 020 7861 1595 M 07436 153573 E will.gubb@knightfrank.com Victoria Player Knight Frank LLP 55 Baker Street London W1U 8AN T 020 7861 1514 M 07720 695954 E victoria.player@knightfrank.com Nick Cripps Knight Frank LLP 55 Baker Street London W1U 8AN T 020 7861 1532 M 07767 418956 E nick.cripps@knightfrank.com MISREPRESENTATION ACT: Knight Frank LLP give notice to anyone who may read these particulars as follows:- 1. Particulars: These particulars are not an offer or contract, nor part of one. You should not rely on statements by Knight Frank LLP in the particulars or by word of mouth or in writing ( information ) as being factually accurate about the property, its condition or its value. Neither Knight Frank LLP nor any joint agent has any authority to make any representations about the property, and accordingly any information given is entirely without responsibility on the part of the agents, seller(s) or lessor(s). 2. Photos etc: The photographs show only certain parts of the property as they appeared at the time they were taken. Areas, measurements and distances given are approximate only. 3. Regulations etc: Any reference to alterations to, or use of, any part of the property does not mean that any necessary planning, building regulations or other consent has been obtained. A buyer or lessee must find out by inspection or in other ways that these matters have been properly dealt with and that all information is correct. 4. VAT: The VAT position relating to the property may change without notice. Knight Frank LLP is a limited liability partnership registered in England with registered number OC305934. Our registered office is 55 Baker Street, London W1U 8AN, where you may look at a list of members names. November 2015.