WOODLAND GROUP DUKES PARK Montrose Road, Chelmsford, CM2 6TE
INVESTMENT SUMMARY Prime South East Freehold distribution warehouse Strategically located close to enabling easy access into the extensive national motorway network Refurbished in 2003, the building provides 159,218 sq ft (14,791 sq m) of industrial accommodation on a site of approximately 7.3 acres (3.0 ha) The property is currently let to Woodland Group Limited until October 2018. The tenant has subsequently entered into a reversionary lease for a further 5 years until October 2023 but is subject to a tenant s break option in October 2018, which allows the tenant to vacate in April 2019 if exercised, therefore providing an unexpired term certain of 3 years. Total rental income of 756,438 per annum equating to a low rate of 4.75 per sq ft. We are instructed to seek offers in excess of 11,000,000 (Eleven Million Pounds), subject to contract, for the freehold interest. This reflects a net initial yield of 6.50% assuming purchaser s costs of 5.80% and a capital value of 69 per sq ft. Based on our opinion of estimated rental value the reversionary yield will be a minimum of 7.53% in October 2018.
JUNCTION 19 15 14 16 13 CUTON HALL LANE 12 11 10 6 7 WOODLAND GROUP DUKES PARK 5 8 SPRINGFIELD ROAD 9 4 MONTROSE ROAD 2 3 1 CHELMSFORD TOWN CENTRE 1 ROYAL MAIL 2 BUCKINGHAM COURT 3 DPD 4 NORTHUMBERLAND COURT 7 PHILIP GRAHAME INTERNATIONAL 10 5 JEWSON 8 11 UPS 6 MKM BUILDING SUPPLIES GRAFTON PLACE 9 AUDI CHELMSFORD ATHOLL ROAD 12 ARGYLL ROAD 13 B&Q 14 ALDI 15 ROYAL MAIL 16 SPRINGFIELD BUSINESS PARK (ROYAL LONDON DEVELOPMENT)
LOCATION Chelmsford is located in the county town of Essex and is the county s main commercial and administrative centre. The town is well located, being 30 miles (48 km) north east of Central London. PUMP LANE COLCHESTER The town benefits from excellent communication links with the providing direct dual carriageway access to Central London, the M25 motorway (Junction 28) which is 12 miles (19 km) away and Colchester 24 miles (39 km) to the north east. The A414, to the south of the town centre, provides access to the M11 motorway (Junction 7) which lies approximately 18 miles (29 km) to the west. The, to the north of the town centre, provides dual carriageway access to Braintree 12 miles (19 km) to the north east. NEW BOWERS WAY PUMP LANE JUNCTION 19 Chelmsford also benefits from an excellent rail service with a high speed connection to Central London (Liverpool Street). There are approximately seven services per hour with a fastest journey time of 31 minutes. Stansted International Airport is easily accessible, being approximately 32 km (20 miles) to the north west, via the M11 motorway. SPRINGFIELD ROAD NEW DUKES RD MONT ROSE RD CUTON HALL LANE RICHMOND R D CHELMER VILLAGE WAY M25 J28/LONDON Cambridge 8 Stansted 0 0 A10 A131 Colchester A10 A414 EPPING M11 7 M11 A414 CHELMSFORD SITUATION Dukes Park Industrial Estate is situated to the north east of Chelmsford, a short distance from Junction 19 of the (Boreham Interchange) which runs southwards to Junction 28 of the M25 within approximately 15 miles (24km). Going northwards Harwich Docks are within approximately 38 miles. Nearby access to the connects with the 0 and thereafter Stansted and the M11 (Junction 8). M25 6/27 M25 Within Dukes Park Industrial Estate, the subject property is situated on Montrose Road, which is one of the main roads within the estate and accommodates industrial occupiers such as Screwfix, Jewson and DPD. WOODFORD LONDON BRENTWOOD 28 29 7 BILLERICAY Within the surrounding location are a number of prime out-of-town retail and roadside occupiers including Wickes, B&Q, Floors 2 Go, Landrover, Toyota and Renault dealerships. STRATFORD SOUTHEND-ON-SEA
DESCRIPTION The property, built in 1984 and extensively refurbished in 2003, is a self-contained distribution warehouse and acts as the global headquarters to Woodland Group. The property is constructed of steel portal frame and provides a total of 159,218 sq ft (14,791 sq m) with twostorey offices at the front. The tenant has recently undertaken an extensive refurbishment of the office accommodation to an exceptionally high standard. The unit benefits from 134 designated car parking spaces. WAREHOUSE SPECIFICATION 7.80m (25.6 ft) eaves height to the underside of the haunch in the main bays and then reducing to 5.70m (18.80 ft) in the loading and dispatching areas Sensor activated high-frequency lighting 11 dock level loading doors 3 level access loading door Secure external yards with upto 50 lorry spaces OFFICE SPECIFICATION Raised floors Double glazing Suspended ceilings with category II lighting Comfort cooling Carpet tiles
ACCOMMODATION The building has been measured on a Gross Internal Area basis in accordance with the RICS Code of Measuring Practice (6th Edition). The breakdown of these areas is as follows: DESCRIPTION AREA (SQ FT) AREA (SQ M) Warehouse 142,862 13,272 Offices 13,106 1,217 Workshop 3,250 302 Total 159,218 14,791 The property also benefits from a permanent mezzanine of 5,140 sq ft (478 sq m), which Woodland Group are currently using as additional office accommodation. SITE AREA The site area totals 7.3 acres (3.0 ha), providing a site cover of 50%. TENURE The property is held freehold. WOODLAND GROUP DUKES PARK
TENANCY The property is fully let on a Full Repairing and Insuring basis to Woodland Group Limited for a term of 15 years from 6 October 2003, expiring on 5 October 2018. The current rent passing is 756,438 per annum which equates to 4.75 per sq ft overall and is paid monthly by the tenant. At lease expiry, the tenant will enter into one of two reversionary leases, which are detailed below:- Lease A - A 5 year reversionary lease from 6 October 2018, expiring on 5 October 2023, with the rent to be agreed at the higher of the current rent passing or an open market rent for the unit, but capped at 875,875 per annum ( 5.50 per sq ft) Or Lease B - A 6 month reversionary lease from 6 October 2018, expiring on 5 April 2019, at a rent of 756,438 per annum ( 4.75 per sq ft). The entire rent is to be paid in advance when notice is served to the landlord on and before 5 April 2018. The lease also contains a rolling landlord break option, which can be exercised if a new letting on the whole unit is achieved, with the tenant benefitting from a claw back mechanism to the capital sum paid in advance. Copies of the lease documentation can be provided upon request. COVENANT DETAILS The tenant, Woodland Group Limited, are a global supplier of supply chain and logistics solutions for a large number of niche sectors. Woodland Group has over 550 employees located around the world who are able to offer technical expertise and in depth logisitics knowledge in air, ocean and road freight. Originally founded in 1988, Woodland Group now operate from six different locations within the UK with the subject property acting as their global HQ unit. Woodland Group Limited (Company number: 05455052) have a Dun & Bradstreet Rating of 3A1 and represent a low risk of business failure. A summary of their last three years of accounts is set out below: YEAR ENDING 31 DEC 2014 31 DEC 2013 31 DEC 2012 Sales Turnover 114,237,000 107,958,000 104,852,000 Pre Tax Profit 1,658,000 1,843,000 832,000 Shareholders Fund 17,385,000 16,798,000 16,042,000
MARKET COMMENTARY CHELMSFORD OCCUPATIONAL MARKET The shortage of available modern industrial stock on the eastern side of the M25 motorway is currently hindering market activity in the region. Occupiers are attracted to the region due to the excellent motorway access and connectivity to the national road network as well as its proximity to Greater London. At present, only one built building larger than 100,000 sq ft remains vacant within a 20 mile radius. This trend is also demonstrated within Chelmsford with virtually no availability of modern stock above 20,000 sq ft. The proposed distribution developments within the region are unlikely to cater for increasing demand in the short to medium term and therefore tangible rental growth across all unit sizes is evident in the region. Chelmsford currently offers a circa 20% discount to prime rents in other Essex locations and LSH research indicates that Chelmsford is forecasted to have an above average rental growth rate of 3.20% per annum in the next 5 years. WOODFORD LONDON STRATFORD Cambridge HARLOW 6.75 psf EPPING M25 6/27 7 M11 M11 8 M25 ROMFORD 7.25 psf Stansted A414 0 BRENTWOOD 28 29 CHELMSFORD 7 BILLERICAY BASILDON 7.00 psf BRAINTREE 7.00 psf A131 SOUTHEND-ON-SEA Colchester INVESTMENT COMPARABLES The UK industrial and distribution investment sector continues to return strong total returns to investors and remains a sector where demand is outstripping supply. Driven by the compelling fundamentals of a positive occupational market seeing record low availability rates, robust income streams coupled with tangible rental growth, investors remain keen to continue to invest within the sector. Investor demand remains focused on the South East of England, which is the second most sought after region outside of London. Some recent transactions highlight demand in this sector for shorter term investments are set out below: DATE PROPERTY UNEXPIRED TERM (YEARS) SIZE (SQ FT) NIY PRICE Jan-16 Sinclair Drive, Park Farm, Wellingborough 5.40 118,958 6.90% 6,630,000 Jan-16 Vantage Point, Maidstone 5.00 77,841 6.08% 6,930,000 Dec-15 Elemis, Poplar Park, Avonmouth 5.70 50,167 5.72% 5,400,000 Dec-15 Co-operative, Cardinal DP, Huntingdon 4.00 98,747 5.44% 9,300,000 Aug-15 Brinklow Industrial Estate, Milton Keynes 2.00 111,445 5.80% 10,200,000
PROPOSAL We are instructed to seek offers in excess of 11,000,000 (Eleven Million Pounds), subject to contract, for the freehold interest. This reflects a net initial yield of 6.50% assuming purchaser s costs of 5.80% and a capital value of 69 per sq ft. Based on our opinion of estimated rental value the reversionary yield will be a minimum of 7.53% in October 2018. VAT The property has been elected for VAT and therefore it is envisaged that the sale will be treated as a Transfer of a Going Concern (TOGC). CONTACTS PHILIP COLMAN 0207 198 2100 pcolman@lsh.co.uk CHARLIE HOW 0207 198 2248 chow@lsh.co.uk EPC The building has been given an EPC rating of 62 C. CHARLIE LAKE 0207 198 2227 clake@lsh.co.uk Subject to Contract and Exclusive of VAT Lambert Smith Hampton March 2016 Disclaimer: Lambert Smith Hampton Group Limited and its subsidiaries and their joint agents if any ( LSH ) for themselves and for the seller or landlord of the property whose agents they are give notice that: (i) These particulars are given and any statement about the property is made without responsibility on the part of LSH or the seller or landlord and do not constitute the whole or any part of an offer or contract. (ii) Any description, dimension, distance or area given or any reference made to condition, working order or availability of services or facilities, fixtures or fittings, any guarantee or warrantee or statutory or any other permission, approval or reference to suitability for use or occupation, photograph, plan, drawing, aspect or financial or investment information or tenancy and title details or any other information set out in these particulars or otherwise provided shall not be relied on as statements or representations of fact or at all and any prospective buyer or tenant must satisfy themselves by inspection or otherwise as to the accuracy of all information or suitability of the property. (iii) No employee of LSH has any authority to make or give any representation or warranty arising from these particulars or otherwise or enter into any contract whatsoever in relation to the property in respect of any prospective purchase or letting including in respect of any re-sale potential or value or at all. (iv) Price or rent may be subject to VAT and any prospective buyer or tenant must satisfy themselves concerning the correct VAT position. (v) Except in respect of death or personal injury caused by the negligence of LSH or its employees or agents, LSH will not be liable, whether in negligence or otherwise howsoever, for any loss arising from the use of these particulars or any information provided in respect of the property save to the extent that any statement or information has been made or given fraudulently by LSH. (vi) In the case of new development or refurbishment prospective buyers or tenants should not rely on any artists impressions or architects drawings or specification or scope of works or amenities, infrastructure or services or information concerning views, character or appearance and timing concerning availability or occupation and prospective buyers or tenants must take legal advice to ensure that any expectations they may have are provided for direct with the seller or landlord and LSH shall have no liability whatsoever concerning any variation or discrepancy in connection with such matters.