METROC ENTRE LANDMARK FREEHOLD SHOPPING CENTRE INTEREST
CONTENTS 1.0 Metrocentre
03
2.0 Regional Shopping Centres in the UK
05
3.0 Overview 3.1 Introduction 3.2 Location & Communications 3.3 Catchment & Demographics 3.4 Spend 3.5 Planning
07 08 09 11 12 13
4.0 Metrocentre 4.1 The Centre 4.2 Tenure 4.3 Tenancy 4.4 Income 4.5 Rental Values 4.6 Retailer Demand & Tenant Mix 4.7 Management 4.8 Service Charge 4.9 Ongoing Asset Management & Proposed Development
15 17 29 30 31 34 35 36 37 40
5.0 Investment Proposal
41
6.0 Further Information
42
01 | METRO C E NTRE
THE CHURCH COMMISSIONERS ARE OFFERING A RARE OPPORTUNITY TO ACQUIRE A FREEHOLD INTEREST IN ONE OF THE UK’S LEADING SUPER REGIONAL SHOPPING CENTRES
1.0 METROCENTRE
The Church Commissioners are offering a rare opportunity to acquire a freehold interest in one of the UK’s leading super regional shopping centres. Metrocentre is one of only eight Super Regional Malls in England. It is the largest of the Super Regional Malls and is currently ranked 4th in the UK Mall Score Rankings (CACI 2014). The Centre is located in Gateshead, approximately 3 miles south of Newcastle city centre and adjacent to the A1 trunk road linking Newcastle to the north and Leeds and onwards to London in the south. Metrocentre benefits from a integrated public transport interchange, including a train station, bus station and coach park with accommodation for 350 coaches. In addition, Metrocentre benefits from over 9,000 free car parking spaces, arranged as surface and four multi-storey car parks. In total, the Metrocentre site comprises 134 acres. A ring road circumnavigates the Centre and provides a direct link onto the A1 trunk road. The Church Commissioners interest in the Centre is Freehold and provides the right to receive 10% of the net income (after allowance of permissible deductions) from the tenant and asset manager, intu.
03 | METRO C E NTRE
Metrocentre has the following distinctive features: •
The interest being sold is Freehold and comprises approximately 134 acres and over 9,000 free car parking spaces.
•
This unique and attractive freehold interest benefits from 10% of future net income. The freehold interest is protected from future building and development capital expenditure.
•
Rare opportunity to gain a 10% exposure to one of Europe’s premier retail destinations.
•
The Centre is ranked 4th nationally in the Super Regional Centres and is one of the largest covered shopping centres in Europe.
•
21,000,000 customers visit the Centre annually.
•
Integrated transport interchange (bus, train and coach).
•
Metrocentre’s retail offer includes Marks & Spencer, Debenhams, Primark, River Island, Next, Superdry, Apple, together with a 17 screen Odeon IMAX Cinema and over 50 restaurants / food outlets.
•
The Centre opened in 1986 and has continued to develop from the original mall and now accommodates 357 retail units over 1.8 million sq ft.
•
One of the ‘best in class’ asset managers currently operating the shopping centre on site, with the benefit of a long lease.
2.0 REGIONAL SHOPPING CENTRES IN THE UK METROCENTRE
METROCENTRE IS ONE OF ONLY EIGHT OUT OF TOWN SUPER REGIONAL SHOPPING CENTRES IN THE UK Metrocentre’s accessibility, free car parking, transport interchange and leading retail and leisure offer make it the premier retail destination for the North East and one of only eight out of town shopping centres in the UK.
TRAFFORD CENTRE MEADOWHALL
Metrocentre Trafford Centre Meadowhall Merryhill
MERRYHILL BRENT CROSS LAKESIDE
Brent Cross Cribbs Causeway Lakeside Bluewater
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CRIBBS CAUSEWAY
BLUEWATER
Current planning restrictions within the UK have significantly restricted the new development of out of town shopping centres. The eight existing super regional centres therefore have a unique characteristic. The scale of these super regional centres is such that they provide a greater opportunity for asset management and tenant engineering to actively achieve rental growth in excess of market performance. Metrocentre has strong bus, road and rail connections. In addition Newcastle City Airport is located 6 miles to the north of the Centre. Metrocentre has been managed by intu since 1995. With over 20 years management experience and being one of the UK’s premier mall operators, intu are best placed to maximise the Centre’s future potential. Metrocentre has been extended and substantially refurbished since its initial opening in 1986 and provides a covered scheme arranged over two levels, divided principally into five retailing malls.
3.0 OVERVIEW
Metrocentre is owned Freehold and occupies a site of 134 acres.
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3.1 INTRODUCTION
Metrocentre opened in 1986 and is located 3 miles south of Newcastle city centre, some 280 miles north of central London. The Centre is located close to Gateshead town centre. The Centre has been modified and extended since its original construction and provides over 1.8 million sq ft of enclosed retail accommodation over two levels, arranged as five distinct malls. Metrocentre provides over 9,000 free car parking spaces, arranged in four multistorey car parks, together with surface car parking. A ring road circumnavigates the entire Centre and provides direct access towards the A1 trunk road. The Centre is currently divided into approximately 357 retail units, which are anchored by six department / variety stores. Currently under construction is an extension to the Food Court, providing a further 13 new food outlets. Metrocentre benefits from a 17 screen Odeon IMAX cinema, together with a Namco Entertainment Centre and over 50 restaurant / food outlets. In addition, the ownership includes MetrOasis, a modern retail development located to the west side of the Centre and housing units for Starbucks, Krispy Kreme, Toby Carvery and Harvester. This development was completed in 2012.
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3.2 LOCATION & COMMUNICATIONS
Newcastle Upon Tyne is the principal focus of economic activity within the north east of England. Newcastle is situated approximately 280 miles north of central London and 120 miles south of Edinburgh. The city benefits from a strong transport infrastructure. Metrocentre is situated to the south of the city centre close to Gateshead, a suburb of Newcastle. Motorway The A1 runs from London to Edinburgh, providing one of Britain’s main arterial routes and is easily accessible, and offers direct access to Metrocentre. Trunk Roads The A19 links to Sunderland to the south. The A69 extends west to Hexham and Carlisle. Rail Newcastle also benefits from an extensive rail network. There are direct train services to Newcastle from Edinburgh, London and York. London Kings Cross can be reached in under 3 hours. Metrocentre has its own rail station, with a direct link to Newcastle city centre in only 7 minutes.
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Metro Newcastle benefits from its own Metro system, linking the surrounding towns on a common transport platform. Buses Metrocentre has its own bus interchange with 26 bus routes serving the Metrocentre. Over 100 buses per hour can arrive at the interchange. In addition, there is a coach park adjacent to the Centre which can accommodate 350 coaches. Air Newcastle Airport is situated 6 miles to the north of the city centre and provides domestic and international flights to a number of European destinations.
Kirkcaldy A92 Cowdenbeath
e
North Berwick Inverkeithing Dunbar
South Queensferry A1
EDINBURGH
EDINBURGH
Haddington
Musselburgh
vingston
Dalkeith Bonnyrigg
Penicuik
Eyemouth
A6
02 A7
8
A7
A703
Berwick-upon-Tweed A697
Peebles
Coldstream A72
A1
Galashiels
Kelso
Selkirk
Jedburgh 7 A69
8
A106 A1
offat
A7
Amble
Otterburn
Ashington
Morpeth
Langholm
A69
A
1 Bedlington
6
Blyth
8
Cramlington NEWCASTLE
A19
Ponteland A7 5
Gretna
Longtown
Hexham A689
Gosforth
A69
A69
Annan
Whitley Bay Tynemouth
NEWCASTLE UPON TYNE
Corbridge
Gateshead
Brampton
METROCENTRE A68
Carlisle
Consett
Wigton
92 A6
A1 A963
Stanley
Houghton le Spring
Chester-le1 Street
A69
Alston
Durham Brandon Crook
Spennymoor Penrith Keswick
Bishop Auckland
Peterlee
A167
M6 A66
SUNDERLAND
Washington
A19
6 A59
Newbiggin-by-the-Sea
Hartlepool
A1(M)
A19
Lockerbie
A6
A689
9 A68
Redcar
Newton Aycliffe
Appleby-in-Westmorland
MIDDLESBROUGH
88
A6
A6
TEESSIDE
A591
6
85
A6
Scotch Corner
Whitby
Stokesley A19
Ambleside
Guisborough
Darlington
Brough
Richmond
A1 72
th
Alnwick
Windermere
M6 Millom
Ulverston
90 A5
Northallerton
Sedbergh
Hawes
Leyburn
Scalby
A1
Kendal
Scarborough
LAND MARK FREEHOLD S HOPPING C ENTRE INTEREST | 10
Thirsk
A170
Pickering
70 A1
Filey
Ladybank
Inveraray
Callander Strachur
Falkland Dunblane Bridge of Allan
Tarbet
Kinross
Glenrothes
Alloa
Stirling
hgilphead
3.3 CATCHMENT & DEMOGRAPHICS
Tighnabruaich
Tarbert
Greenock
Falkirk
Largs
Dunbar
South Queensferry
EDINBURGH
Haddington
Musselburgh
Livingston
Dalkeith Bonnyrigg
Airdrie
Paisley
Eyemouth
Penicuik
Shotts
Motherwell
Hamilton East Kilbride
Kilbirnie
Bathgate
Armadale
GLASGOW
Inverkeithing
Linlithgow
Cumbernauld
Clydebank
Johnstone
Millport
Kilsyth
Kirkintilloch
Port Glasgow
Rothesay
Kennacraig
Kirkcaldy Cowdenbeath
Dunfermline Grangemouth Bo'ness
Denny
Alexandria Dumbarton
Gourock
Elie
North Berwick
Helensburgh
Dunoon
Buckhaven
Larkhall
Berwick-upon-Tweed
Carluke
Strathaven
Kilwinning
Ardrossan Metrocentre has a population within a 30 minute drive time of inLanark excess of 1.3 million and Peebles Lesmahagow Kilmarnock Biggar Irvine benefits from one of the strongest catchment populations of all the super regional shopping Brodick malls. The catchment area extends to the south to include Sunderland and Durham, to the north TroonWhitley Bay, and to include Morpeth and to the west to include Hexham. The total shopper Mauchline catchment extendsPrestwick to approximately 1,950,000. Ayr
Coldstream
Galashiels
Abington
Cumnock
Jedburgh
The total population within the Metrocentre catchment area is 1,947,210. The age profile of the New Cumnock Metrocentre primary catchment population includes a relatively high proportion of young adults aged 15 - 24. Maybole Straiton
Girvan
Market Share
Primary
368,190
47.0%
Secondary
378,212
22.6%
411,947 788,861
Langholm
Lockerbie
Bedlington
Gretna
Longtown
Market (Core):
Brampton
ÂŁ643.9m 34.4%
Kirkcudbright
Market Share (Total):
NEWCASTLE UPON TYNE
Corbridge
Gateshead
METROCENTRE
Carlisle
Consett
Wigton Alston
17.6%
SUNDERLAND
Washington
Stanley
Houghton le Spring
Chester-leStreet
Durham Brandon
Whithorn
Maryport
Workington
Whitley Bay Tynemouth
Gosforth Hexham
ÂŁ3,645.02m
Dalbeattie
Blyth
Ponteland
17.6% Castle Douglas
Newbiggin-by-the-Sea
Cramlington
Annan
Market Potential(Resident based):
Drummore
Morpeth
4.4%
Dumfries
1,947,210
Total Residential Expenditure: Stranraer
Source: CACI 2014
Ashington
12.1%
Newton Stewart
Portpatrick
Otterburn
Lochmaben
New Galloway
TotalCairnryan
Alnwick
Amble
Total Population
Quaternary
Hawick
Moffat
Dalmellington
Tertiary
Kelso
Peterlee
Crook
Spennymoor
Cockermouth
Penrith Keswick
Bishop Auckland Appleby-in-Westmorland
Whitehaven
Redcar
Newton Aycliffe
MIDDLESBROUGH Darlington
Brough
M6
Egremont
Hartlepool
A1(M)
Guisborough
Whitby
Stokesley Scotch Corner
Ambleside
Richmond
Windermere
Kendal
Hawes
M6
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Northallerton
Sedbergh
Thirsk Millom
Ulverston Grange-
Kirkby Lonsdale
Scalby
Leyburn
Pickering
3.4 SPEND
Retail Centre
Minor Class
Region
Comparison Goods Expenditure Rank
Catchment Comparison Goods Spend (£m)
2014 Resident Population
2014 Shopper Population
Bluewater
Premium Outer London Regional Malls
South East
9
£1,152.0
6,568,737
543,425
Trafford Centre
Large Premium Regional Malls
North West
12
£1,050.9
5,375,940
542,407
Meadowhall
Large Regional Malls
Yorkshire and The Humber
15
£974.0
2,863,894
499,657
Gateshead - intu Metrocentre
Large Regional Malls
North East
25
£652.4
1,947,210
342,484
Dudley - Merry Hill
Large Regional Malls
West Midlands
34
£569.9
3,158,812
314,868
Brent Cross
London Regional Malls
London
35
£548.4
5,168,223
266,749
Cribbs Causeway
Large Premium Regional Malls
South West
37
£527.1
2,072,534
246,605
intu Lakeside
Outer London Regional Malls
East of England
41
£504.1
4,840,448
233,176
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CURRENT UK PLANNING LEGISLATION RESTRICTS THE DEVELOPMENT OF SUPER REGIONAL MALLS. AS SUCH METROCENTRE IS PROTECTED FROM FURTHER OUT OF TOWN SHOPPING CENTRE DEVELOPMENT
3.5 PLANNING Current UK planning legislation restricts the development of super regional malls. As such Metrocentre is protected from further out of town shopping centre development. Metrocentre lies adjacent to Gateshead which is a town with a resident population of 23,000. The land surrounding the Metrocentre is currently zoned in the local plan for future development.
Policy A0C2 (Metrogreen) in the Core Strategy and Urban Core Plan details how a mixed-use sustainable community will be delivered through a co-ordinated phased approach, providing new residential neighbourhoods, commercial, leisure and community facilities, a network of green spaces and routes for pedestrians and cyclists and sustainable improvements to public transport. Between now and 2023, The Metrogreen area will deliver:
Areas Of Change – Metrogreen The Metrogreen Area of Change is outlined in the council’s Core Strategy and Urban Core Plan for Gateshead and Newcastle upon Tyne 2010-2030.
•
850 new homes at an overall average of 40 dwellings per hectare.
•
Complementary mixed-use development located close to sustainable transport links, including 15,000 sq m (160,000 sq ft) of office accommodation.
The area is located between the River Tyne and the A1 encompassing the Metrocentre, retail, office and industrial development and areas of vacant underused land. The area is rich with regeneration opportunities and potential to regenerate a large area of brownfield land with good access to public transport and the strategic road network.
•
Community facilities to support those people living and/or working in the area.
The Metrocentre is located in the centre of the Metrogreen area and there is the potential for the Centre to further evolve from not just a premier out of town shopping destination but also a focal point for a new residential community.
The new development will be supported by: •
Improved pedestrian and cycling accessibility to the Transport Interchange and improvements to public transport infrastructure.
•
Improvements to the highway network to enable increased traffic densities.
•
New recreational areas and public space.
The Metrogreen area totals 213 hectares (including the Metrocentre). The area identified for development is 106 hectares, which in addition to the provision outlined in the above policy, also has the potential to deliver 1,300+ new homes in the post plan period.
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Existing Buildings Potential Development Plot Potential Pedestrian Route Existing Green Space Future Development Area (Post 2030) Metrogreen Area of Change
© Crown Copyright and database right [2015]. Ordnance Survey [100019569]. © Crown copyright and database rights 2015 Ordnance Survey Gateshead Council [100019132].
LAND MARK FREEHOLD S HOPPING C ENTRE INTEREST | 14
4.0 METROCENTRE
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METROCENTRE COMPRISES APPROXIMATELY 1.8 MILLION SQ FT OF RETAIL AND LEISURE ACCOMMODATION LET TO SOME OF THE MOST ESTABLISHED NATIONAL AND INTERNATIONAL RETAILERS
4.1 THE CENTRE Metrocentre, one of only eight out of town super regional shopping centres in the UK, is one of the leading retail and leisure venues in Europe. The Centre comprises approximately 1.8 million sq ft of retail and leisure accommodation let to some of the most established national and international retailers. Metrocentre is arranged over two levels and is divided into five coloured malls; Red, Green, Blue, Yellow and Platinum. The Centre has remained a “must have” location for retailers since opening and has evolved over a number of years with extensions and refurbishments tailored to the changing shopping habits of the modern consumer.
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Metrocentre Timeline 1986
Red Mall and Green Mall opened.
1987
Blue and Yellow Malls opened together with bus and rail stations and the Blue multi-storey car park.
1988
The Forum opened.
1989
The Mediterranean Quarter (now known as The Qube) opened.
1990
The A1 Western Bypass trunk road opened.
1992
North perimeter link to the A1 opened.
2002-04
Red Mall is extended and refurbished including building Debenhams department store, 27 new retail units and multi-storey car park. New Public Transport Interchange is developed. Metrocentre becomes the largest shopping and leisure centre in Europe.
2009
Newly redeveloped mall and restaurants in “The Qube” (part of the Yellow Mall) opened. The new NAMCO Funscape area is launched including 18 ten-pin bowling lanes, dodgem track and children’s soft play area. The new Odeon cinema with 3D screens opened, the only IMAX theatre in the region.
2012
MetrOasis opens welcoming new operators; Harvester and Toby Carvery, Starbucks and Krispy Kreme.
2014
Work completed on transformation of central “link” mall to the Platinum Mall creating a luxury retailing quarter.
2016
Opening of The Qube 2 food quarter.
4.1 THE CENTRE
Metrocentre benefits from six anchor stores which combined provide 66,892 sq m (720,024 sq ft): Anchor store
Sq M
Sq Ft
Marks & Spencer
17,221
185,367
Debenhams
16,743
180,222
House of Fraser
12,847
138,284
Bhs
7,887
84,900
TK Maxx
5,226
56,251
Primark
6,968
75,000
66,892
720,024
Total
The Metrocentre’s five coloured malls are configured over ground and first floor levels and provide a rich retail mix ranging from premium fashion brands to independent retailers designed to cater for all shopper types. The Metrocentre includes themed shopping areas known as the Village and the Forum, accommodating primarily independent retailers. The Centre also benefits from a large dining and leisure quarter known as The Qube which houses over 23 restaurants, bars and café’s anchored by an Odeon IMAX 17 screen cinema. The MetrOasis is a standalone development situated to the west of the main centre providing catering accommodation arranged in 4 double height units.
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GROUND FLOOR PLAN
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FIRST FLOOR PLAN
| 22
4.1 THE CENTRE
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Red Mall The Red Mall was extended and refurbished (opening in 2004) and is anchored by a Debenhams department store. The Red Mall features a wide selection of high street fashion and footwear retailers combined with a popular Apple store, jewellery operators, music/game retailers, coffee shops, accessory stores and travel and banking facilities. The Mall benefits from large well configured stores housed under a glazed roof which provides natural light contributing to a pleasant shopping environment. On the upper level, the Red Mall links to the Yellow Mall and the new Qube development.
Green Mall Incorporates the Town Square atrium and links to the Red Mall. Green Mall is anchored by three department stores; M&S, House of Fraser and Bhs. Shop units are generally smaller than those in the Red Mall and tenants include high street fashion retailers, cosmetic, pharmaceutical and beauty brands, and a selection of jewellery and phone stores.
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Platinum Mall This is the central area of the Centre which has been refurbished and renamed the Platinum Mall. This area focuses on a premium retail offer. Platinum Mall is the only mall to have direct connection to all other malls and the tenant mix has been transformed from mass market to a premium offer including a new Champagne Bar.
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Yellow Mall The Yellow Mall incorporates the newly refurbished Qube restaurant and catering development and IMAX Odeon Cinema. The eastern section of the mall houses Primark and also includes an Argos store and a small selection of fashion retailers and kiosks. The Primark store at the eastern end of Yellow Mall marks the start of Blue Mall.
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4.1 THE CENTRE
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Blue Mall Provides the Centre’s value retailing and on the lower level is anchored by a large TK Maxx store. The Blue Mall benefits from strong footfall from the railway and bus transport interchange which can be accessed from the northern end of the mall. At first floor level the Blue Mall extends into the Forum, a dedicated independent retailer hub.
Car Parking Metrocentre benefits from over 9,000 free parking spaces in four colour-coded car parking areas (Blue, Green, Yellow and Red car parks) which link to the colour-coded malls. Additional parking is available at The MetrOasis with a maximum stay of four hours. Metrocentre car parks have been awarded the Park Mark certificate which is given by Northumbria Police to car parks which have achieved the standards of the Safer Parking Scheme. Electric car charging points are located in the Yellow and Green car parks, including UK’s first publicly available quick charger which can charge cars to 80% capacity in around 20 - 30 minutes.
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4.2 TENURE The property is held freehold by the Church Commissioners and is let to intu for a term of 200 years expiring 27th September 2195 (approximately 180 years unexpired). Under the terms of the head lease, the Church Commissioners as freeholders are entitled to receive a ground rent reflecting 10% of total net rents received (after permitted deductions). Upon head lease expiry, the right to receive 100% of income derived from the shopping centre will revert to the freeholder. The headrent collected in 2014 was £4,561,890. The shopping centre asset management is undertaken by intu, more details are available under “Asset Management”.
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4.3 TENANCY The Metrocentre is sublet on approximately 450 leases and licences. A number of the retail leases provide for the rent to be paid on a base and turnover basis. In addition, many of the retailers lease remote storage units from the landlord. Commercialisation activities generate a further ÂŁ1.4 million per annum. Several of the anchor stores are let on long leases thereby providing significant income security. intu is therefore able to manage the Centre with the use of a selection of leases that are contracted outside the security provisions of the 1954 Act thereby retaining the ability to adjust the tenant mix to suit customer aspirations and tenant demand.
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THE CENTRE CURRENTLY PRODUCES A GROSS RENT OF APPROXIMATELY £50 MILLION PER ANNUM
INCOME EXPIRY PROFILE
4.4 INCOME
0-2 years 8.6%
10+ years 25.5% 2-5 years 26.9%
The Centre currently produces a gross rent of approximately £50 million per annum. This is scheduled to rise throughout 2015 and again in 2016 when completion of the Qube 2 Food Court takes place. The table below summarises the gross and net income in the Centre for the last four years. Year to March
Gross Rent
Net Rent
Rent payable to CC
2011
£54,561,194
£46,156,192
£4,615,619
2012
£52,240,581
£47,452,370
£4,745,237
2013
£50,541,378
£44,987,517
£4,498,751
2014
£49,982,953
£45,618,909
£4,561,890
5-10 years 39%
INCOME BY OCCUPIER TYPE Local 9.36%
51% of the contracted rent is derived from the top 25 tenants. The top 8% of tenants by income pay 27% of the contracted rent.
Miscellaneous 1.9%
Anchor 23%
National Multiple 30.8%
International Multiple 34.94%
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4.5 RENTAL VALUES Prime rental levels in the Metrocentre reached £325ZA in 2007. At present the highest rental levels have been achieved in the Red Mall where rents have stabilised at £250ZA. In the Green Mall rental levels have been established at £215ZA. The Blue Mall provides the value offer within the Centre and the rental tone is £100ZA.
£75
£50* £65
£100 £200
£80
£250
£105
£215
GROUND FLOOR
* Overall rate
£100
FIRST FLOOR LAND MARK FREEHOLD S HOPPING C ENTRE INTEREST | 34
METROCENTRE IS ONE OF THE MOST SOUGHT AFTER RETAIL DESTINATIONS IN THE UK
4.6 RETAILER DEMAND & TENANT MIX Metrocentre is one of the most sought after retail destinations in the UK. Vacancy rates are currently low in keeping with the historic trend of the Centre. Retailer demand exists for all five malls which offer a range of unit sizes and configuration. New units in the Centre include River Island, Superdry, H&M Kids and Footlocker. The scale and diverse nature of the Centre allows tenant engineering initiatives and improvements to constantly evolve. Current negotiations are ongoing with a number of tenants.
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METROCENTRE IS MANAGED BY intu, RENOWNED UK SHOPPING CENTRE OWNERS AND MANAGERS WHO SPECIALISE IN CREATING QUALITY ENVIRONMENTS WITHIN WHICH RETAILERS AND BRANDS CAN EXCEL
4.7 MANAGEMENT Metrocentre is managed by intu, renowned UK shopping centre owners and managers who specialise in creating quality environments within which retailers and brands can excel. At Metrocentre, through meticulous management and consistent improvements, intu have created and maintained an exciting retail and leisure destination which customers want to visit time and time again. High footfall generated by the assembly of a world class retail mix matching consumer requirements has created value for retailers and customers alike. intu are at the forefront of UK shopping centre management and are breaking new ground in creating a multichannel shopping environment that provides free wifi within the Metrocentre as well as a seamlessly integrated online shopping platform.
intu’s approach to shopping centre management is focused upon: •
Making intu locations the most desirable for shopping and socialising
•
Astutely managing the assets to take advantage of new trends and occupiers
•
Building long-term partnerships with local authorities and communities
•
Delivering the required planning approvals for all projects and generating the required level of demand to commence a project
•
Offering a distinctive customer signature experience at all intu centres
•
Having a best-in-class digital offering to retailers and customers
•
Delivering a consistent national brand partnership, experiential and advertising opportunity on and offline
intu constantly review and measure success through ongoing monitoring of footfall, occupancy and income performance.
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4.8 SERVICE CHARGE Metrocentre is operated by a comprehensive service charge which covers the entire running of the Centre. Up to 300 staff are employed and the Centre management suite is located at the junction of the Yellow and Green Malls at first floor level. The onsite management team run the Centre on a daily basis, the costs of which are recoverable through the audited service charge. The 2015 budget is circa £13.4 million and is apportioned between the tenants on a weighted floor area basis. The service charge at Metrocentre also includes insurance which differentiates it from competing schemes. The table below sets out a breakdown of the previous three years’ service charge figures.
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Year
Total
2015
£13,453,804
2014
£13,134,107
2013
£12,779,930
4.9 ONGOING ASSET MANAGEMENT & PROPOSED DEVELOPMENT Qube 2 development is currently on site and is completely redesigning the food quarter linking into the Red Mall. It is anticipated practical completion will occur in February 2016 with tenants opening for trade from summer 2016. This development will greatly enhance the leisure offer within the Centre and improve both dwell time and customer experience. Further initiatives are being considered and the intu team are in discussions with a number of existing and new retailers with a view to enhancing the vitality of the Centre.
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5.0 INVESTMENT PROPOSAL For the benefit of our client’s unique freehold 10% interest in this super regional shopping centre we are inviting expressions of interest from selected investors with a view to providing more detailed information (subject to non-disclosure agreement) in a second stage marketing process. Interested parties will need to have the capacity to acquire this interest and the ability to partner the tenant in its ownership. In order for investors to consider the proposition further we have summarised below the projected income from the Centre for the next 5 years based up on the current income and both the ongoing and future initiatives being undertaken at the Metrocentre. Year to March
Gross Rent
Allowable Deductions
Freehold Interest Net Rent
Comments
2015
£50,475,578
£4,190,164
£4,628,541
Provisionally Reconciled
2016
£48,820,000
£3,750,000
£4,507,000
Estimated Figures
2017
£51,490,000
£3,500,000
£4,799,000
Estimated Figures
2018
£55,240,000
£3,500,000
£5,174,000
Estimated Figures
2019
£55,290,000
£3,500,000
£5,179,000
Estimated Figures
41 | METRO C E NTRE
6.0 FURTHER INFORMATION Further information and supporting documents are available in the data room which can be found at the following link: www.metrocentre-investment.co.uk For further information please contact: Richard Brown Tel: +44 (0)20 7318 7818 Email: richard.brown@eu.jll.com
James Waldock Tel: +44 (0)20 7852 4830 Email: james.waldock@eu.jll.com
Joshua Vernon Tel: +44 (0)20 7087 5346 Email: joshua.vernon@eu.jll.com
MISREPRESENTATION ACT 1967 | DISCLAIMER COPYRIGHT Š JONES LANG LASALLE IP, INC. 2015. All rights reserved. Jones Lang LaSalle Limited for themselves and for the vendor of this property whose agents they are give notice that: a) 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. b) All descriptions, dimensions, references to condition and necessary permissions for use and occupation, and other details are given in good faith and are believed to be correct, but any intending purchasers should not rely on them as statements or representations of fact but satisfy themselves by inspection or otherwise as to the correctness of each of them. c) No person in the employment of Jones Lang LaSalle Limited has any authority to make or give any representation or warranty whatever in relation to these properties. d) All plans, maps and photographs provided are for indicative purposes only. June 2015. Designed and produced by Creativeworld Tel: 01282 858200
LAND MARK FREEHOLD S HOPPING C ENTRE INTEREST | 42
METROC ENTRE