RETAIL WAREHOUSE INVESTMENT
INVESTMENT CONSIDERATIONS Excellent communications, with access to the A1(M) at junction 59 located approximately 3.7 miles to the north Located in an established retail and trade park location on the corner of the junction accessing the nearby Morrisons supermarket Let to two 5A1 covenants in McDonalds Restaurants Ltd and B & M Retail Ltd AWULT of 12.41 years B & M benefits from an open RPI linked rent review in December 2016. RPI compound to November 2014 (7.8%) Freehold Planning permission in place for an additional non-food retail unit Total Passing Rent of 286,641 pa rising to 312,482 pa in December 2016 (1) We are instructed to seek offers in excess of 4,000,000 (Four Million Pounds), subject to contract and exclusive of VAT. A purchase at this level would reflect a net initial yield of 7% and a reversionary yield of 7.67% in December 2016 and 150,000 on the development land. (1) Assuming HM Treasury average RPI forecast going forward.
MEYNELL ROAD RETAIL PARK 57.8m Bulmers Square El Sub Sta 56.8m North Road Industrial Estate ENT PM DEVELO E SIT MEYN ELL R OAD PC 55.9m WH North Road Industrial Estate D OA ER SO ES El Sub Sta 52.5m Post El Sub Sta Hopetown Park We stm o rela nd SL SL Str eet Club ss S tree t Harry Street Site outline for indicative purposes only. Tynemouth South Shields A696 A68 A1 W h e s s oe A19 A1231 Washington SUNDERLAND A694 A692 A693 ark d A691 nm Ro a A1018 A167 De Me y ne ll R oa A184 Gateshead d NEWCASTLE UPON TYNE Jarrow A690 A1(M) A68 Durham A19 MIDDLESBROUGH A1053 A66 A171 Durham Tees Valley International Airport A66 A172 et Allia nc n ow e c o t e Terrace L an rt h re Surtees St 75m Crown Copyright, ES 100004106. For identification purposes only. The town has excellent communications being situated to the east of junctions 57 and 58 of the A1 (M), the main arterial route linking Leeds and Newcastle-upon-Tyne. om iw ay Albert Ro St North Road pet Willow Road East No A1 Bo n Ho A19 50m Being located on the east coast mainline provides regular services to Newcastle-upon-Tyne, London Kings Cross and Edinburgh with shortest journey times of 33 mins, 2hr 20 mins and 1hr 58 mins respectively. 1 mile to town centre on Road ati DARLINGTON A66 A66 Brotton A174 25m The market town of Darlington is situated within County Durham in north-east England. The town is located approximately 16 miles (26 km) to the west of Middlesbrough and 37 miles (60 km) south of Newcastle-upon-Tyne. Whess oe Roa d t tree es Anns Terra ce Redcar Wilson S treet A1(M) A1150 A67 Brinkburn Road Billingham Fairfield St reet A688 A6072 A68 A689 A177 St Terrace ley Ot A167 A689 Sou th A179 Hartlepool 0m LOCATION Str eet A16 7 A69 A69 William Street No rth Ro ad A19 Cro Newcastle McNay Stree t ad Newcastle Airport is situated approximately 45 miles (72 km) north of the town and serves 74 domestic and global destinations. In 2013 4.46 million passengers passed through the airport. Cl ev el a nd S tr ee t
SITUATION Meynell Road Retail Park is situated on the western side of Meynell Road, an established and popular retail and trade park location adjacent to national multiple occupiers including Morrisons, B&Q, Plumb Center, Build Center, Howdens and Topps Tiles. Meynell Road Retail Park is situated close to the prominent junction with Whessoe Road which provides access to the A167. The road is the only throughway to the car park for the nearby Morrisons supermarket, there by funnelling large vehicle numbers past the subject property. DESCRIPTION Meynell Road Retail Park comprises two standalone properties with planning permission in place for an additional unit of 5,900 sq ft (GIA). The B & M Home & Garden unit with rear compound was constructed in the mid-1980s and the McDonalds drive through restaurant completed in early 2015. In addition there is a car park providing 91 spaces. Goods loading for the B & M unit is via a separate access road to the north of the property. The car park was resurfaced and floodlit in 2015 as part of the works to develop the new McDonalds unit. The properties provide the following Gross Internal Areas (GIA): Sq M Sq Ft McDonalds 383 4,122 (1) B & M 2,318 24,951 2,701 29,073 (1) For the purpose of rent review the GIA will be a minimum of 3,767 sq ft. THE TOWN Darlington has a district population of approximately 106,000 persons with an overall primary retail catchment for the town estimated to be 308,000. The telecommunications company EE is the town s largest employer providing over 2,500 jobs. Other major employers in the town include The Student Loans Company, Student Finance England, AMEC and Hitachi. There are three competing out-of-town retail parks in Darlington being Darlington Retail Park, Neasham Road Retail Parade and Morton Park, providing an adequate out-of-town retail supply in the town. Planning has been granted for Darlington North Retail Park approximately 0.3 miles to the south east of the subject property. The scheme comprises eight units and totals approximately 40,000 sq ft of predominantly A1 retail warehouse accommodation. The site is approximately 95% pre let with Aldi, Iceland, Poundland, Subway and KFC amongst others having taken up pre letting agreements within the new 4 acre park. The site is expected to open by Spring 2016. The scheme will add to the draw of the location for retail provision.
TENURE Freehold TENANCY Unit Tenant Lease Start Lease Expiry Current Rent (pa) Rent Review Comments 1 McDonalds Restaurants Ltd 2 B & M Retail Ltd 25/12/2014 24/12/2039 86,641 ( 21.02) 25/12/2011 24/12/2021 200,000 ( 8.01) Total Rent 286,641 25/12/2019 5 yearly thereafter Year RPI Figure RPI - Year on Year Compounded Rent Level 2012 (Nov) 245.6 3.0% 205,954 2013 (Nov) 252.1 2.6% 211,405 2014 (Nov) 257.1 2.0% 215,597 Forecast 2015 (Nov)* 261.5 1.7% 219,263 Forecast 2016 (Nov)* 269.3 3.0% 225,841 *HM Treasury (March 2015) average. Open Market Rent Review. FRI Lease Service charge cap at 12,000, increased annually by RPI 25/12/2016 RPI Linked Rent Review. Effectively FRI Lease Service charge cap at 16,204.29, increased annually by RPI PLANNING On 13/12/1995 planning permission was granted for the retention of a trade, retail, storage, showroom and sales unit with garden centre, car parking and service areas, at the Great Mills Store, Whessoe Road, Darlington subject to the following conditions: None of the following goods shall be sold from the retail sales unit hereby permitted: (a) food and drink for consumption off the premises; (b) fashion, clothing and footwear; (c) books and stationery other than specialist publications related to the permitted use of the premises; (d) toys, games, handbags, musical instruments and recordings; (e) sports equipment and clothing, except insofar as related to the permitted use of the premises; (f) jewellery, perfume and toiletries. On 14/11/2011 a planning variation was granted for the following consent (application ref 11/00618/FUL): The following goods may be sold on an ancillary basis: i. Toys and stationary; ii. Ambient, non perishable food, drink and confectionary, iii. Clothing and footwear including baby goods iv. Toiletries. The total sales area devoted to display for sale and sale of goods listed in i iv above shall not exceed 520 sq. m net and total net (sales) floor space within the store and garden centre shall not exceed 3,166 sq. m The McDonalds Unit benefits from A5 planning use. There is outline planning in place for an additional non-food retail unit of 5,900 sq ft (GIA). Copies of the planning consent are available on request.
ASSET MANAGEMENT & FURTHER DEVELOPMENT Extend the B & M Lease Potential to split the B & M unit if the tenant were to vacate Prelet the additional retail unit Develop the planned retail unit COVENANT McDonalds was founded in 1940 and has grown to have over 35,000 restaurants across 119 countries worldwide. There are currently more than 1,200 restaurants in the UK. McDonalds Restaurants Ltd recorded a turnover of 1,497,573,000, a pre-tax profit of 244,885,000 and a tangible net worth of 799,006,000 in December 2013. The covenant has a Dun & Bradstreet rating of 5A1. B & M was founded in 1978 and currently has over 400 stores across the UK employing over 19,000 staff. B & M wants to increase its number of stores to 850. The retailer specialises in discount goods including food, homeware, toiletries, toys, pet goods and clothing. B & M Retail Ltd recorded a turnover of 935,229,000, a pre-tax profit of 88,323,000 and net current assets of 150,650,000 in December 2012. The covenant has a Dun & Bradstreet rating of 5A1.
EPC Unit 1 has been rated 40 (Grade B). Unit 2 has been rated 40 (Grade B). A copy of the Energy Performance Certificates are available upon request. VAT The property will be subject to VAT although we anticipate the sale will be treated as a Transfer of a Going Concern. PROPOSAL We are instructed to seek offers in excess of 4,000,000 (Four Million Pounds), subject to contract and exclusive of VAT. A purchase at this level would reflect a net initial yield of 7% and a reversionary yield of 7.67% in December 2016 and 150,000 on the development land. FOR FURTHER INFORMATION OR TO MAKE ARRANGEMENTS FOR VIEWING PLEASE CONTACT: Andy Pointon 020 7543 6720 andy.pointon@allsop.co.uk Scott Tyler 020 7543 6719 scott.tyler@allsop.co.uk Jonathan Butcher 020 7543 6755 jonathan.butcher@allsop.co.uk www.allsop.co.uk Misrepresentation Act: 1. Allsop LLP on its own behalf and on behalf of the vendor/lessor of this property whose agent Allsop LLP is, gives notice that: (a) these particulars do not constitute in whole or in part an offer or contract for sale or lease; (b) none of the statements contained in these particulars as to the property are to be relied on as statements or representations of fact; and (c) the vendor/lessor does not make or give, and neither Allsop LLP nor any of its members or any person in its employment has any authority to make or give, any representation or warranty whatsoever in relation to the property. The only representations, warranties, undertakings and contractual obligations to be given or undertaken by the vendor/lessor are those contained and expressly referred to in the written contract for sale or agreement for lease between the vendor/lessor and a purchaser or tenant. 2. Prospective purchasers or tenants are strongly advised to: (a) satisfy themselves as to the correctness of each statement contained in these particulars; (b) inspect the property and the neighbouring area; (c) ensure that any items expressed to be included are available and in working order; (d) arrange a full structural (and where appropriate environmental) survey of the property; and (e) carry out all necessary searches and enquiries. Allsop is the trading name of Allsop LLP. Design: CommandD www.commandhq.co.uk 03.15