Wharfside Shopping Centre by Creativeworld

PENZANCE, CORNWALL

Prime Town Centre Shopping Investment Opportunity

INVESTMENT CONSIDERATIONS •

Penzance is the principal administrative and retail centre in West Cornwall.

•

The town has a catchment of approximately 28,000 people within a 10 minute drive which rises to 60,000 in the busy summer months.

•

The scheme provides the only purpose built shopping destination in Penzance and possesses multiple national retailers which include: New Look, Iceland, Argos, Costa, Carphone Warehouse, Claire’s, Card Factory and Game.

•

Predominantly freehold.

•

Total accommodation of 71,171 sq ft (6,121 sq m) which includes 3 large stores, 20 retail units, offices and 22 residential ground rents.

•

Immediately adjacent to the centre is Market Jew Street, which, together with the Wharfside Shopping Centre, forms the prime retail destination in the town.

•

22 attractive residential units within the scheme all sold off on long leasehold tenancies paying annual ground rents.

The scheme provides the only purpose built shopping destination in Penzance

•

Customer access to the town’s main car park providing 749 spaces.

•

WAULT of 5.5 years to lease expiry (4.6 years to tenant break).

•

Strong income profile with 68% of gross income secured to national multiple retailers.

•

A number of asset management opportunities to enhance value.

•

Current gross income of £677,456 per annum with current passing net income of £610,938 per annum after deduction of occupational shortfalls and landlord contribution to marketing.

•

Offers in excess of £6,356,000 are invited for the predominantly freehold interest.

•

An attractive net initial yield of 9.00% assuming purchaser’s costs of 6.8%.

Weston-super-Ma Ilfracombe

Burnham-on-Se

Minehead Barnstaple

Bideford

A380

A388

A3 9

Bodmin A392

A30

St Austell St Ives

Redruth

A38

Saltash Torpoint

Fowey

90 A3

Truro

Newton Abbot

A391

Newquay

Dawlish

A30

PLYMOUTH

A38

Torquay Paignton Brixham

9 Camborne A3

A394

Helston

Falmouth

PENZANCE

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A30

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PENZANCE

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Penzance Station

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A30

1 31 B3

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BAT TE R Y

A30

29 30 6 A37

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Penzance is the principal administrative and retail centre in West Cornwall L Hâ&#x20AC;&#x2122;S SEP JO

Ilm

Tiverton

EXETER

7 A3

86 A3

The thriving town of Penzance forms the principal administrative and retail centre in the District of Penwith, West Cornwall and is located at the south west tip of England approximately: 8 miles (13km) south of St. Ives, 27 miles (43km) west of Falmouth and 78 miles (125km) west of Plymouth. Penzance, in 2015, had a resident population of approximately 28,000 which represents 5.1% of the total Cornwall population of 549,400 (cornwall.gov.uk).

5 A3

PENZANCE

Taunton M

A39

Sidmouth

COMMUNICATIONS Penzance benefits from good communications; by road, rail, sea and air both further west into Cornwall and outward to the south west, as well as many national links. Penzance is located on the A30 – one of Cornwall’s main arterial roads – which allows connection between Penzance and the M5 motorway corridor. Additionally, Penzance benefits from connection via the A394, A390 and A38, all allowing easy access to Penzance and other holiday destinations. As the town also lies at the western terminus of the Cornish Main Line, passengers from Penzance can travel to destinations such as London Paddington, Bristol, Plymouth and more locally to St. Ives, Exeter, Truro and Reading. The majority of these services are operated by Great Western, affording passengers views of major tourist attractions such as St. Michael’s Mount and Mount’s Bay. CrossCountry also offer a select number of long

distance services, allowing passengers to travel from Penzance to Newcastle, Edinburgh, Derby, Leeds and York. The bus and coach station is located next to the railway station, from where First South West Operate local trips around the town and most major settlements in Cornwall, as well as National Express offering services to London Victoria via Heathrow. The nearest passenger airport is Newquay, located 32 miles (52km) north east of the town; this flies to several national and international destinations, which include: London, Dublin, Newcastle and Dusseldorf. Moreover, a frequent ferry service is operated from Penzance Harbour to the Isles of Scilly , with the government in 2014 promising new funding of £7.3 million towards a £12.8 million scheme to improve the harbour infrastructure at both St Mary’s and Penzance with £1.8 million to repair local roads.

DEMOGRAPHICS AND LOCAL ECONOMY Penzance, in 2015, had a resident population of 28,000 within an approximate 3 mile radius (10 minute drive time), all of which having quick access to the centre of Penzance. Cornwall, after the development of mainstream rail travel in the 1960s, has grown significantly, and is among the fastest growing counties in the United Kingdom. Tourism in Cornwall is a major part of the local economy, contributing up to 24% of Cornwall’s GDP; the county welcomes 3.6 million tourists every year, generating roughly £1.85 billion per annum (Visit Cornwall – research conducted by Cornwall County Council). Penzance forms a critical axis for holiday makers and tourism in the area, as it is the most westerly major settlement in England, allowing tourists to explore the surrounding countryside further, and thus the population is swelled to around 60,000 during the summer holiday period with an expected 600,000 tourists visiting Penzance each year (Cornwall County Council). Total shopping expenditure of around £92.25 million is accessible within a 3 mile radius of Penzance, and this is in conjunction with tourism providing £44 million per year for the local economy and 1,400 jobs (Coastal Communities + CACI). During and before the 19th century , The economy of Penzance was based upon the industries of agriculture, fishing and mining; more recently, the local economy has adapted to harness the benefits of tourism and is now mainly comprised of light industrial, tourism and retail businesses. Cornwall has been growing as a county since the 1960’s and has consistently grown faster than the rest of the South West region. Between 1981 and 2010 Cornwall’s population rose by 24.6% (105,713 people) and is projected to further increase by 19% between 2010 and 2031.

Demise line for indicative purposes only

TO BE PREMIER INN

MARKET JEW STREET

CHURCHILL RETIREMENT LIVING (NOW COMPLETE)

WHARF ROAD

INVESTMENT IN PENZANCE 1.

Churchill Retirement Living have been developing 50 one and two bedroom apartments on New Town Lane, immediately south of the Wharfside Shopping Centre. The apartments are nearing completion – one bedroom apartments are priced from £208,950 and the two bedrooms from £300,950. The apartments enjoy views over Penzance harbour and will provide brand new customers for the neighbouring Wharfside Centre.

In July 2016, Premier Inn submitted a planning application to convert Branwells Mill, a property around 115 metres (380ft) from the centre, into a 61 room hotel plus breakfast restaurant. This is in response to high demand for Premier Inn bedrooms in the area. Works are underway and completion of the hotel is expected soon. This is a short walk from Wharfside.

In 2014, the government promised a new £7.3 million of funding towards a £12.8 million scheme to improve harbour infrastructure at both St. Mary’s and Penzance with £1.8 million to repair local roads.

PENZANCE RAILWAY STATION

BUS STATION

RETAILING IN PENZANCE MAIN TOWN CAR PARK (749 SPACES)

Wharfside Shopping Centre forms the main retail pitch of Penzance. Its central location, variety of retailers and large car park provide the main retailing and community amenity for Penzance. The scheme also provides the only managed retail environment within Penzance, enhancing the overall investment opportunity. The town acts as the main retail outlet for West Cornwall and thus offers a range of local and national retailers, which include: New Look, Iceland, Argos, Costa, Saltrock , Carphone Warehouse, Claire’s, Card Factory and Game – all of which are located within the centre.

SITUATION Wharfside Shopping Centre is situated on the front of Penzance Harbour, however it also has a central location as it is positioned in the middle of Penzance town centre. The town’s main retail space is primarily organised along the eastern side of Market Jew Street, running on a north-south axis. The scheme is bordered also by Wharf Road to the east, New Town Lane to the south and Market Jew Street which wraps around to the west and north of the centre. The scheme is configured with pedestrian access from both Market Jew Street and Wharf Road which leads to the 749 space, council owned, Harbour car park. We understand there is a deed of covenant making sure that the Council provide a minimum number of 550 spaces in this car park for a further 32 years. 7

DESCRIPTION Opened in 1999, Wharfside Shopping Centre is a purpose built establishment located within the centre of Penzance. Set on a sloping site between Market Jew Street and Wharf Road, the centre provides approximately 71,171 sq ft (6,612 sq m) of retail accommodation over three levels, along with two further levels of office and residential accommodation, as well as ancillary community buildings and site management facilities. The lower ground, mezzanine and ground floors comprise of appealing, modern retail accommodation with the upper levels providing residential, office and storage space. The Lower Ground Floor, fronting Wharf Road at the rear of the centre, consists of 6 units and a sizeable MSU, let to Iceland. Access to the lower ground floor from the ground floor is provided by steps, an escalator and a customer lift.

The principal mall, with easy access from Market Jew Street, at the front of the centre, provides the main pedestrian through route between the high-street retail destination of Market Jew Street and the 749 space Harbour car park. New Look, one of the schemeâ&#x20AC;&#x2122;s anchor tenants, is located on this level. Servicing to tenants of the two main retail levels is provided from the large service yard on the lower ground floor accessed from New Town Lane. The centre, in addition to the retail offering, also incorporates 22 residential properties, which consist of one and two storey apartments, all located upon the first and second floors of the scheme. These residential properties have all been sold off on long leases producing annual ground rents. Additionally, there are a total of 21 car parking spaces within the scheme (10 of these are covered car parking spaces within the service yard and a further 11 off New Town Lane are held on licenses by the residential properties).

Wharfside Shopping Centre is a purpose built establishment located within the centre of Penzance

WHA

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TO BE A NEW

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FAMIL Y

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CAFE

Penzance

(749) (ACTUAL)

GROUND FLOOR 25 metres

TENURE

TENANCIES AND INCOME

The property is predominantly held freehold.

The centre is let in accordance with the tenancies and accommodation schedule attached. The leases are drawn on effectively full repairing and insuring terms by means of a comprehensive service charge.

Part of 85A Market Jew Street (highlighted yellow on the GOAD plan) is held leasehold, on a 10 year lease from 25th March 2014 (subject to a tenant break clause at year 5) at a current passing rent of £18,750 per annum. This property is sublet co-terminously to Warrens Bakery Limited. The land to the rear of 88-89 Market Jew Street (highlighted blue on the GOAD plan) is held long leasehold for a term of 99 years from 25th March 1999 at a current passing rent of £2,000 per annum.

The scheme is anchored by Iceland and Argos until 2024 and New Look until 2023 with a weighted average unexpired lease term (WAULT) of 5.5 years to lease expiry (4.6 years to tenant break). The centre has a current gross income of £677,456 per annum. After deduction of occupational shortfalls, head rent and landlord’s contribution to marketing, the centre produces a net operating income of £610,938 per annum.

Retailers include: New Look, Iceland, Argos, Costa, Carphone Warehouse, Claire’s, Saltrock, Card Factory and Game 10

Penzance

LOWER GROUND FLOOR

(749) (ACTUAL)

Penzance

Experian Goad Plan Created: 25/07/2017 Created By: Coady Supple LTD

fidentiality Experian, 2017. © Crown copyright and database 00019885

For more information on our products and services: www.experian.co.uk/goad | goad.sales@uk.experian.com | 0845 601 6011

FIRST FLOOR

nfidentiality Experian, 2017. © Crown copyright and database 100019885

Experian Goad Plan Created: 25/07/2017 Created By: Coady Supple LTD 11 For more information on our products and services: www.experian.co.uk/goad | goad.sales@uk.experian.com | 0845 601 6011

SCHEDULE OF TENANCIES AND ACCOMMODATION Address & Occupier

Lease dates

Unit

Tenant

Trading As

From

Term Years

LSU1

New Look Retailers Limited

New Look

29 Sep 1998

28 Sep 2023

Base Store

New Look Retailers Limited

New Look

08 May 2001

28 Sep 2023

MSU1

Iceland Foods Limited

Iceland Frozen Foods

11 Jan 2014

10 Jan 2024

11 Jan 2019

60,000

MSU2

Argos Limited

Argos

11 Jan 1999

10 Jan 2024

11 Jan 2019

79,500

Kiosk - Unit 1

Vacant

Unit 2

Costa Limited

Costa Coffee

30 Jul 2008

29 Jul 2018

45,000

Unit 2A

Light & Life Church

Changing Room

09 Jan 2011

29 Jul 2018

Unit 3

St Justin Limited

St Justin

14 Jul 2015

13 Jul 2025

Unit 4 Ground

Claires Accessories UK Ltd

Claire’s Accessories

25 Apr 2016

24 Mar 2018

10,000

Unit 4 Upper

Paul Leslie Billing & Judith Anne Dawn Billing

Whirlwind Sports

21 Oct 2001

02 May 2011

1,221

Unit 5

Paul Leslie Billing & Judith Anne Dawn Billing

Whirlwind Sports

25 Mar 1999

24 Mar 2014

28,000

Unit 6

Mrs Elaine Orrey A New Family Restaurant

Under offer assumed lease dates

01 Sep 2017

31 Aug 2032

Unit 7

Vacant

Unit 8

The Carphone Warehouse Limited

Carphone Warehouse

25 Mar 2014

24 Mar 2019

Unit 9

Sportswift Limited

Card Factory

05 Nov 2008

04 Nov 2018

38,500

Unit 10

Game Retail Limited

Game

25 Mar 2014

24 Mar 2019

30,600

Unit 11

Saltrock Surfwear Limited

Saltrock Surfwear

18 May 2015

17 May 2025

Unit 12

Philip Larkin & Angela Larkin

Ma Larkin’s Sweets

02 Mar 2016

01 Mar 2021

Unit 13

Sessions Surf Shops Limited

Sessions

25 Mar 1999

24 Mar 2022

Unit 14a

Stephen Bell

Fatty’s Barbers

31 Oct 2016

30 Oct 2026

Unit 14b

Peter William Waller & Heather Metcalfe

Willy Wallers

01 Mar 2005

28 Feb 2015

Unit 15

Helly’s Tea Rooms

Helly’s Tea Rooms assumed lease dates

01 Sep 2017

31 Aug 2032

Break Type & Notice Period

Pass Next Break Date

Next Rent Review

Passing Rent £

29 Sep 2018

160,000 1,000

MBO

14 Jul 2018

14 Jul 2016

01 Aug 2022

17,000

40,000

0 25 Mar 2017

TBO

18 May 2020

23,500

17,500 12,000

25 Mar 2021 31 Oct 2018

25,000 10,000 9,250

TBO

01 Sep 2024

01 Aug 2022

18,000

sing

Areas

Comments

Current Landlord Shortfalls

Passing Rent Zone A £

ITZA Sq ft

Total Sales Sq ft

Total Ancillary Sq ft

Total Area Sq ft

Total Area Sq m

Rates Shortfalls

Service Charge Shortfalls

Insurance Shortfalls

Total Current Shortfalls

6.55

19,928

4,498

24,426

2,269

2,900

269

8.45

7,100

660

6,133

2017/2018 service charge cap of £19,466.89 gives rise to the landlord shortfall.

1,622

7,530

374

7,904

734

18,410

2017/2018 service charge cap of £26,618.48 give rises to the landlord shortfall.

0.00

1,356

260

1,625

696

1,499

139

0.00

510

1,388

600

1,988

185

10,753

480

11,233

526

671

14.90

670

1,241

115

329

Tenant holding over.

40.80

670

1,241

329

1,570

146

Tenant holding over.

1,210

2,435

1,717

4,152

386

New 15 year lease in solicitors hands, stepped rent £30,000 pa for years 1 & 2, £35,000 pa for years 3 & 4, £40,000 pa year 5 (vendor to top up).

0.00

640

1,045

304

1,349

125

13,681

9,779

365

23,825

648

1,051

314

1,365

127

58.10

647

1,069

311

1,380

128

626

985

305

1,290

120

20.30

848

1,370

308

1,678

156

598

800

42.40

563

704

543

1,247

116

272

300

Rent increases to £10,000 per annum on 31.07.2019 (topped up by vendor).

31.70

292

340

Lease renewal in negotiations.

600

700

In solicitors hands, completion imminent. Assumed lease dates, 15 year term, tenant break option year 7, 6 month rent free period and stepped rents topped up by vendor.

From 14 July 2015 - 13 July 2016 = £15,000; from 14 July 2016 - 13 July 2017 = £16,500; from 14 July 2017 - 13 July 2018 = £17,000; from 14 August 2018 - 13 July 2020 = £19,000 and thereafter £20,000

Fixed uplifts to £22,000 in 2017 & £23,500 in 2018 (topped up by vendor).

SCHEDULE OF TENANCIES AND ACCOMMODATION Address & Occupier

Lease dates

Unit

Tenant

Trading As

Unit 16

Vanessa & Adrian Thomas

Unit 17/18

From

Term Years

Mermaid Too

17 Feb 2017

16 Feb 2022

Hunter Walsh Limited

Hunter Walsh Hair Salon

07 Apr 2017

06 Apr 2027

ATM

Cardpoint Services Limited

ATM

11 Aug 2014

10 Aug 2019

5,000

Comm 1 (upper level)

Derek Thomas MP

23 Sep 2014

22 Sep 2019

3,000

Comm 2 (upper level)

Anchorage Trust

Mannas Diner

25 Mar 2009

24 Mar 2019

3,000

Comm 3 (upper level)

Penwith Community Radio Station CLIC

Penwith Community Radio

01 Aug 2014

31 Jul 2019

85a MJS

W.T. Warren and Son (Hayle) Limited

Warrens Bakery

25 Mar 2014

21 Mar 2024

87a MJS (offices)

Jackson (Life & Pensions) Ltd

14 Jul 2014

13 Jul 2021

Land at rear 90 93 MJS

Peacocks

1,000

Car parking

21 spaces 11 currently let

4,040

Flats

Residential Ground Rents (22 flats)

25 Mar 1999

24 Mar 2098

Land at rear 90 - 93 MJS headlease

Right of way

25 Mar 2003

24 Mar 2102

25 Mar 2014

24 Mar 2024

85a - headlease TOTAL

Next Break Date

Next Rent Review

Passing Rent £ 4,995

TBO

07 Apr 2022

25 Mar 2019

07 Apr 2022

15,000

25 Mar 2019

25,000

14 Jul 2018

10,000

25 Mar 2032

1,100

(2,000)

TBO

25 Mar 2019

(18,750) 677,456

TOTAL RENTAL INCOME

£677,456

OCCUPATIONAL SHORTFALLS

(£65,518)

LANDLORD CONTRIBUTION TO MARKETING

(£1,000)

TOTAL NET INCOME

£610,938

Break Type & Notice Period

Pass

sing

Areas

Comments

Current Landlord Shortfalls

Passing Rent Zone A £

ITZA Sq ft

Total Sales Sq ft

Total Ancillary Sq ft

Total Area Sq ft

Total Area Sq m

Rates Shortfalls

Service Charge Shortfalls

Insurance Shortfalls

Total Current Shortfalls

26.00

192

Rent year 1 £2,000 per annum (to reflect the cost of a new shop front), rent years 2 - 5 £4,995 per annum (year 1 rent topped up to this level by the vendor).

390

671

550

1,221

113

6 month rent free period (topped up by vendor to year 5 fixed increase), initial rent £10,000 per annum rising to £12,000 per annum in year 4 and £15,000 per annum in year 5. Tenant only break clause in year 5.

661

44.10

1,362

127

410

33.30

750

1,127

105

4,288

5.18

872

1,060

1,932

179

from 14 July 2018 - 13 July 2019 = £10,500; from 14 July 2019 - 13 July 2020 = £11,000; from 14 July 2020 - 13 July 2021 = £11,500

Land at the rear by undated licence on 3 month’s notice by either party.

From 25 March 1999 - 24 March 2032 = £50; from 25 March 2032 - 24 March 2065 = £100; from 25 March 2065 - 24 March 2098 = £200

Freeholder is Sun Life.

Freeholder is Mr N Newton. Tenant option to break.

13,007

57,196

13,975

71,171

6,612

15,037

49,623

858

65,518

Current gross income of £677,456 per annum with current passing net income of £610,938 per annum

INCOME ANALYSIS MAJOR TENANTS BY GROSS RENT

INCOME EXPIRY PROFILE TO BREAK

Argos £79,500 (11%) New Look £160,000 (23%)

£800,000

Iceland Frozen Foods £60,000 (9%)

Local

National

£700,000

£600,000

Costa Co�ee £45,000 (6%)

Rent Roll

£500,000

Mrs Elaine Orrey New Family Restaurant £40,000 (6%)

Remainder £143,106 (20%)

£300,000

£200,000

Card Factory £38,500 (6%)

£100,000

Game £30,600 (4%) Carphone Warehouse £23,500 (3%) Warrens Bakery £25,000 (4%)

Whirlwind Sports £28,000 (4%)

The scheme incorporates 21 car parking spaces (10 of these are covered car parking spaces within the service yard and a further 11 are located off New Town Lane which are held on licenses by the residential properties). In addition, the centre benefits from the large, council owned, 749 space Harbour car park to the rear of the scheme. We understand there is a deed of covenant that requires the Council to provide a minimum of 550 spaces in this car park for a further 32 years.

MANAGEMENT AND SERVICE CHARGE The management of the Wharfside Shopping Centre is currently undertaken by Savills. There are 6 on-site staff (a full time centre manager and facilities manager along with a part time administrator, facilities assistant and two part time security officers). All other services and contracts are out sourced to external suppliers covered under the service charge budget. The employment of the on-site staff will transfer on sale in accordance with TUPE regulations. The operating costs of the Wharfside Shopping Centre are covered by a comprehensive service charge. The service charge has a 31 March year end. The budget for the current year to 31 March 2018 is £354,851 (£3.71 psf) compared to a budget for 2016/17 of £330,600 (£3.46 psf).

£-

South Shore Surf and Skate £25,000 (4%)

CAR PARKING

£400,000

Initial 43100 43465 43830 44196 44561 44926 45291 45657 46022 46387 46752 47118 47483 47848 48213 48579

ASSET MANAGEMENT OPPORTUNITIES •

Explore the potential to release additional value from the unused space on New Look’s first floor demise by way of a surrender and re-let for leisure or residential uses.

•

Since Argos are consolidating many of their stores within J Sainsbury investigate whether Argos are prepared to pay a reverse premium to surrender their existing lease which still has over 6 years remaining. This space could be re let to an alternative retailer.

•

Let the vacant unit.

•

Renew and regear existing tenancies to extend the WAULT.

•

Improve commercialisation and investigate potential for advertising hoardings.

•

Potential to convert the space currently used by Penwith Community Radio on the upper floor to residential.

VAT The asset has been elected for VAT and VAT will therefore be chargeable on the purchase price if it is not possible to arrange for this transaction to be treated as a Transfer of a Going Concern (TOGC).

INCOME BY COVENANT

Local 32%

National 68%

EPCS

FURTHER INFORMATION

Energy Performance Certificates for the property are available upon request.

Address: Wharfside Shopping Centre, Market Jew Street, Penzance, Cornwall, TR18 2GB

PROPOSAL Offers in excess of £6,356,000 are invited for the predominantly freehold interest in the Wharfside Centre. A purchase price at this level would produce an attractive net initial yield of 9.00% assuming purchaser’s costs of 6.8%.

CORPORATE SALE The property is held (along with The Grove Shopping Centre, Witham) in the Leopard Guernsey RSC Witham Penzance Propco Limited. There is the opportunity for a combined corporate acquisition of these two assets.

WEBSITE

Coady Supple 12 St George Street London, W1S 2FB +44 (0) 207 629 5251

www.coadysupple.com Dermot Supple +44 (0) 20 7629 5276 dermot@coadysupple.com David Sadler +44 (0) 20 7629 5259 david@coadysupple.com Robin Coady +44(0) 20 7629 5272 robin@coadysupple.com

All supplementary ‘back up’ information is available on the password protected, marketing website.

MISREPRESENTATION ACT Messrs Coady Supple, for themselves and the vendors of this property whose agents they are give notice that: The particulars are set out as general outline only for the guidance of intending purchasers, and do not constitute, nor constitute part of an offer or contract: All description dimensions, references, references to condition and necessary permission for use and occupation and other details are given in good faith and are believed to be correct but intending purchasers should not rely on them as statements of representations of fact and must satisfy themselves by inspection or otherwise as to the correctness of each of them: No person in the employment of Coady Supple has any authority to make or give any representation of warranty in relation to this property. All negotiations are subject to contract. September 2017. Designed and produced by Creativeworld Tel:01282 858200

PENZANCE, CORNWALL