INVESTMENT FOR SALE PRIME HIGH STREET RETAIL
INVESTMENT SUMMARY 100% Prime Pitch in Linthorpe Road, Middlesbrough. Rents rebased and considered reversionary. Let to 2 strong regional covenants DARLINGTON BUILDING SOCIETY & HAYS TRAVEL LTD plus 125 ground lease on uppers sold off on Long Leasehold interest. TOTAL NET INCOME 98,000 PAX. We are instructed to seek offers of 1,200,000 (ONE MILLION & TWO HUNDRED THOUSAND POUNDS), subject to contact and exclusive of VAT. A purchase at this level reflects an attractive NET INITIAL YIELD OF 7.49% assuming standard Purchaser s costs of 5.92%. The property is elected for VAT which will therefore be payable on the purchase price. It is envisaged that the sale will be treated as a Transfer Of a Going Concern (TOGC).
LOCATION Middlesbrough is a sub-regional centre and the principal administrative centre of the Teesside conurbation, combining Stockton, Thornaby and Redcar. Middlesbrough is the third biggest retail shopping centre in the North East with over 1.7m Sq ft of retail floor space. It is the retail heart of the Tees Valley. The town is located approximately 40 miles South of Newcastle, 12 miles East of Darlington and 52 miles North of York. The town has a population of 138,900 (Middlesbrough Council 2016) with Teesside having a population of 662,600. Middlesbrough has good road and rail communications, with the A66 dual carriageway linking to the regions primary North/South arterial routes, the A19 and the A1(M). Middlesbrough has direct rail links to Darlington situated on the East Coast Mainline, which has a journey time to London King s Cross of approximately 2.5 hours. Durham Tees Valley airport is situated approximately 10 miles to the South-West of the town.
SITUATION The subject property is located in Linthorpe Road in what is, without doubt, a 100% prime location on the pedestrianised western side of the pitch. The property is located immediately opposite The Cleveland Shopping Centre, with nearby retailers including House of Fraser, Debenhams, Boots, Top Shop, River Island, Holland & Barret and Deichman Shoe. The former BHS store close by is undergoing a c. 3m refurbishment for retailers Flannels, USC and Sports Direct. DESCRIPTION DARLINGTON BUILDING SOCIETY HAYS TRAVEL AGENT The property is a mid-terraced modern brick built retail property providing two retail units at ground floor with basement storage. The self-contained first and second floors are accessed separately from Linthorpe Road and have been sold off on a long leasehold interest. The property benefits from rear access by way of a loading alleyway within the ownership.
ACCOMMODATION TENANCY EPC UNIT TENANT RENT PAX TERM LEASE RENT REVIEW AREAS ITZA BASEMENT COMMENTS EPC START (BREAK) SQ FT SQ M SQ FT SQ M SQ FT SQ M 47 Linthorpe Road Darlington 52,500 10 26/02/2015 26/02/2020 1,030 96 653 61 682 63 2 years rent free Building Society reflecting 66 ZA D (80) 49 Linthorpe Road Hays Travel Ltd 42,500 10 24/11/2016 24/11/2021 1,299 121 595 55 625 58 3 months rent penalty (24/11/2021) on break. 9 months rent tenant only free reflecting 64 ZA E (101) Uppers 20 20 Residential 3,000 125 Estimated Long leasehold interest. 01/07/2017 Fixed ground lease rent TBC increase to 6,000 pax at 5th anniversary review then annual RPI compounded 5 yearly N/A TOTAL 98,000 2,329 217 1,248 116 1,307 121 TENURE Freehold.
TENANT COVENANT INFORMATION HAYS TRAVEL LIMITED (01990682) www.haystravel.co.uk Hays Travel Limited is the UK s largest independent travel agent, trading from over 100 retail stores and online. Based predominately in the North East the business acquired Bath Travel Limited in October 2013 increasing its presence on the south coast on England. Hays Travel Limited receives a creditsafe rating of A 87/100, signifying Very Low Risk. Hays have traded in the town for over 20 years and relocated to the current unit from Corporation Road. They represent a strong tenant with strong business roots in the town. DARLINGTON BUILDING SOCIETY www.darlington.co.uk Darlington Building Society is an independent building society mutually owned by members, headquartered in Darlington, County Durham and founded in 1856. They trade from 10 locations in Teesside, North Yorkshire and County Durham. Darlington Building Society receives a creditsafe rating of 62/100, signifying Low Risk. Darlington Building Society is an operator who by their nature is geographically focused, and have also relocated into the established and better located pitch of Linthorpe Road. YEAR TO DATE TURNOVER PRE TAX PROFIT SHAREHOLDER S FUNDS 31/10/2016 332,041,000 7,514,000 24,561,000 31/10/2015 307,699,000 6,721,000 19,309,000 YEAR TO DATE TOTAL INCOME PRE TAX PROFIT TOTAL ASSETS 331/12/2015 9,583,000 1,883,000 532,293,000 31/12/2014 9,467,000 1,717,000 531,347,000 31/10/2014 253,055,459 3,300,212 13,942,028
47-49 LINTHORPE ROAD MIDDLESBROUGH TS1 5BS RETAIL MARKET COMMENTRAY Middlesbrough is the dominant retail core for Teesside and the wider area, with The town s four shopping centres and high Street together attracting almost 18 million visitors per year. Retail rents in Middlesbrough have adjusted from their peak of 135 Zone A with the established tone now at 60-75 Zone A. There have been a number of recent transactions including those at the subject property. Holland & Barret - doubling their unit opposite reflecting 75.82 ZA & Eat 4 Less opening at 75 Linthorpe Road reflecting 61.36 ZA. The 2017 rates revaluation has benefitted Middlesbrough significantly, reducing occupation costs for retailers which in time should lead to rental growth. With rents stabilising and uptake increasing in the town there is a strong chance of rental growth before the reviews.
KEY MIDDLESBROUGH STATISTICS 1,147,115 total retail catchment (CACI Retail Footprint 2015). 256.7m p.a. comparison goods spend (CACI Retail Footprint 2015). 4,353 p.a. average household comparison goods spend. Middlesbrough has a thriving independent retail sector that includes Baker Street, home to a variety of independent retailers, traders, eateries and bars. This is complemented by Linthorpe Road Central with its array of designer boutiques such as Psyche and Triads. Middlesbrough recently named a rising star in the Great British High Street competition to recognise the great strides it is making in improving the town centre. Centre Square is the largest civic space in Europe and home to MIMA (Middlesbrough Institute of Modern Art) and the focal point for outdoor events in Middlesbrough hosting Middlesbrough MELA, Music Live, Proms in the Park and the start of the Tour De Yorkshire in 2016. The eastern side of Centre Square will be the focus of 250,000 sq ft of a new Grade A1 office development over the next few years. www.centre-square.co.uk Le Bistrot Pierre have agreed terms to take in Albert Road with a planned opening for July 2017. A 159 bed Holiday Inn Express opened August 2015 and is overtrading. 8m Heritage Lottery Funded refurbishment of Middlesbrough Town Hall commenced in March 2016 and will include a major improvement to the performance space venue with a new entrance off Albert Road, new registry office and new heritage visitor attraction. Projected audience numbers post refurbishment: 2018/19 106,526 2019/20 114,654 (Currently between 70,000 80,000 per annum) Projected opening date - December 2017. The Cleveland Shopping Centre opposite attracts 195,000 visitors per week. Centre North East in Newport Road is being converted into 540 new student apartments and will include a new 7 lane bowling alley, restaurants and bars opening Summer 2017. Teesside University - recently undergone a 260m refurbishment and home to 29,000 students with numbers due to increase over the next few years. The University contributes additional wealth to the local, regional and national economies as measured by Gross Value Added (GVA). It is estimated this contributes a total of 124 million GVA per annum. Major investment projects totalling 500m have resulted in significant changes in the town with the creation of over 4,000 new jobs, support for new and growing business, expanded learning and leisure / retail opportunities and the building of 7,000 new homes. Middlesbrough College has invested over 100m on its new purpose built campus, including; MC6, the Sixth form Centre to accommodate a growing number of students.
VAT The property is elected for VAT so all costs will be subject to VAT at the prevailing rate. EPC The Energy Performance Certificates for the various demises are summarised above, a full copy of the certificates are available upon request. VIEWING Strictly through the sole agents Connect Property North East Ltd: Andrew Wilkinson T: 01642 602001 E: andrew@cpne.co.uk www.cpne.co.uk PRICING We are instructed to seek offers of 1,200,000 (ONE MILLION & TWO HUNDRED THOUSAND POUNDS), subject to contact and exclusive of VAT. A purchase at this level reflects an attractive NET INITIAL YIELD OF 7.49% assuming standard Purchaser s costs of 5.92%. The property is elected for VAT which will therefore be payable on the purchase price. It is envisaged that the sale will be treated as a Transfer Of a Going Concern (TOGC). IMPORTANT NOTICE: whilst every reasonable effort has been made by Connect Property North East to ensure accuracy, interested parties are strongly advised to take appropriate steps to verify by independent inspection or enquiry all information for themselves and to take appropriate professional advice. (i) No description or information given about the property or its value, whether written or verbal or whether or not in these particulars ( information ) may be relied upon as a statement of representation or fact. Connect Property North East nor its employees have any authority to make any representation and accordingly any information given is entirely without responsibility on the part of Connect Property North East or the seller / lessor. (ii) Any photographs show only certain parts of the property at the time they were taken. Any areas, measurements or distances given are approximate only. (iii) Any reference to alterations to, or use of any part of the property is not a statement that any necessary planning, building regulations or other consent has been obtained. These matters must be verified by any intending buyer / lessee. (iv) Any buyer/ lessee must satisfy himself by inspection or otherwise as to the correctness of any information given. (v) VAT is applicable unless expressly stated otherwise. Connect Property North East Ltd Registered Company Number 9404628. May 2017.